The Nifty50 started off the week on a strong note and remained bullish throughout the session to end at a fresh record closing high on February 8, backed by strong global cues and consistent FII inflow. Banking & financials, auto, IT, and metals stocks led the market higher.
The index formed a bullish candle on the daily charts as closing was higher than opening levels. Experts feel the momentum may drive the Nifty50 towards 15,300 levels if the index decisively surpasses 15,159 levels in the coming sessions.
Considering poor risk-reward ratio in favour of bulls from current levels, Mazhar Mohammad of Chartviewindia.in advises traders to remain neutral on the index and particularly shorts should be avoided unless strong signs of weakness are visible.
The Nifty50 opened higher at 15,064.30 and hit an intraday record high of 15,159.90, but did not break 15,000 today. The index closed 15,115.80, up 191.50 points or 1.28 percent.
"Bulls continued their saga of hitting new lifetime highs as Nifty registered the first-ever close above 15,000 levels. However, the intraday trading range remained narrower with 118 points which resulted in a small bullish candle in which upper shadow is dominating the candle body hinting selling pressure at higher levels. Moreover, out of the last four trading sessions, despite Nifty moving higher with positive closes, three sessions appear to have formed indecisive patterns suggesting weakening momentum in the upward journey," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
Hence, he feels some sort of breather for bulls look inevitable in the next couple of trading sessions though weakness in this regard will be confirmed on a close below 15,014 levels.
On such a close, Nifty may trigger a corrective downswing, according to him.
"Nevertheless as momentum is still favouring the bulls if they manage to push the index beyond 15,159 levels then the ideal target shall be 15,300 levels," he said.
India VIX moved up by 2.30 percent from 23.41 to 23.95 levels, which needs to cool down below 21 mark for continuation in the ongoing momentum with higher market base, Chandan Taparia of Motilal Oswal Financial Services (MOFSL) said.
On the options front, maximum Put open interest was at 14,000 followed by 13,500 strike while maximum Call open interest was at 15,500 followed by 16,000 strike. Put writing was seen at 14,500 and 15,000 strikes while some Call writing was visible at 15,500 strike.
The above-mentioned option data indicated a wider trading range for the Nifty at 14,500-15,500 for the coming sessions.
Bank Nifty opened gap up at 36,073.85 but moved quite steadily during the day. It moved sideways and consolidated for the most part of the day. The banking index did not surpass the previous day's high but ended the day with gains of 329.20 points at 35,983.70.
"The index continues higher bottom from the last seven sessions but formed an Inside Bar candle on the daily scale. Now it has to hold 35,500 zone to witness an up move towards 36,500 levels, while on the downside support is seen at 35,000 and then 34,500 levels," Chandan Taparia, Analyst-Derivatives | Retail-Research at Motilal Oswal Financial Services said.
On the front of the stocks, bullish setup was seen in M&M, Ramco Cements, Container Corporation, Hindalco, Tata Motors, Exide Industries, Voltas, JSW Steel, Bajaj Finserv, Mindtree, Berger Paints, Tata Steel, ICICI Bank, Siemens, Grasim and L&T while weakness was seen in BHEL, PNB, Britannia Industries, Godrej Consumer Products and Petronet LNG, Taparia added.