Nifty managed to remain in the green and close above the crucial resistance of 14,700 on May 6. It formed a small bullish candle on the daily charts. Auto, Metals and IT stocks led the rally.
Experts feel the index needs to hold 14,700 levels to surpass the 15,000 mark in the coming sessions, while on the downside, 14,600 is a crucial support.
Mazhar Mohammad of Chartviewindia advised traders to remain neutral on the index by shifting focus towards stock-specific opportunities whereas traders with long side bias on Nifty are advised to maintain a stop below 14,600 levels.
India VIX moved up marginally by 0.34 percent from 21.96 to 22.03 levels.
The Nifty50 opened higher at 14,668.35 and hit a day's low of 14,611.50 amid volatility. The index gained strength in late morning deals and extended gains to hit an intraday high of 14,743.90 before signing off the session at 14,724.80, up 106.90 points.
"Although Nifty50 appears to have cleared its near term critical hurdle, the trading range remained narrower within 130 points which depicted a small bullish candle. Hence, in the next trading session, to retain the positive bias, it needs to sustain above 14,611," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia told Moneycontrol.
According to him, if bulls manage to float Nifty above 14,740 levels for atleast 30 minutes, the possibility of up move extending towards 14,920 to 15,000 will be much higher. However, "it should be worth noting that none of the technical oscillators/indicators, at this point in time, are making a compelling case for a sustainable up move," he said.
Moreover, "Nifty is struggling around its 50-day simple moving average. Hence, the current strength which is visible shall remain vulnerable for a sudden downfall," he added.
Contrary to this, if Nifty breaches 14,600 levels, then the weakness shall initially drag it down towards 14,500 levels, he said.
On the options front, maximum Put open interest was seen at 14,000 followed by 13,500 strike, while maximum Call open interest was seen at 15,000 followed by 15,500 strike. Marginal Call writing was seen at 14,800 strike while minor Put writing was seen at 14,200 then 14,300 strike. Option data indicated that the Nifty could see an immediate trading range of 14,500 to 15,000 levels.
Bank Nifty opened gap up at 32,900.75 but witnessed rangebound movement since its opening levels. It has been facing some resistance near to its 50 DEMA from the last five trading sessions. It closed positive with the gains of 44.10 points at 32,827.80 and formed a bearish candle on the daily scale with a long lower shadow.
"Bank Nifty has to hold above 32,750 levels to witness an up move towards 33,333 and 33,500, while on the downside support is seen at 32,500 and 32,250 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
Nifty future closed positive with the gains of 0.69 percent at 14,694 levels. On the stocks front, bullish setup was seen in Hindalco, Max Financial Services, Jindal Steel & Power, Marico, GAIL, Wipro, Cholamandalam Investment, Mindtree, Tata Steel, TVS Motor, Bharat Electronics, SAIL, Bajaj Auto, BPCL, Grasim, NMDC and Maruti Suzuki, while weakness was seen in Tata Chemicals, Sun TV Network and L&T Finance Holdings, he added.