Mazhar Mohammad of Chartviewindia.in asked short-term traders to remain neutral on the index.
Indian shares traded higher for the most part of the day, with the Nifty closing near the 11,900-mark on October 27 backed by banking & financials, auto, FMCG and pharma stocks.
The Nifty opened higher at 11,807.10 and gradually gained strength after an initial hour of volatility to hit the day's high of 11,899.05. The index climbed 121.60 points or 1.03 percent to close at 11,889.40.
The index formed a bullish candle on the daily charts as closing was higher than opening levels but as it has been moving in the 11,700-12,000 range, experts expect the Nifty to remain sideways unless the range gets decisively broken on either side, giving a direction to the market.
For the time, short-term traders should remain neutral on the index while positional traders, who are already short, should consider a square off if the Nifty closes above 11,950, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
"In the next couple of trading sessions, Nifty may trade inside 11,942 – 11,711 kinds of levels and future direction shall emerge once the Nifty manages a breakout from the trading range," Mohammad said.
In such a scenario, a sustainable close above 11,942 shall prompt the bulls to look for a breakout above 12,025, which shall swiftly facilitate a move towards 12,200 levels, he said.
Similarly, a close below 11,711 will encourage the bears once again to breach 11,661 levels to reinstate themselves in a commanding position, Mohammad said.
India VIX fell by 2.78 percent from 22.83 to 22.19 levels while the option data continued to indicate the same immediate trading range of 11,700-12,000 for the Nifty.
On options front, maximum Put open interest was seen at 11,000 followed by 11,500 strike, while maximum Call open interest was at 12,000 followed by 12,500 strike. Call unwinding witnessed at most of the immediate strike price while Put writing was seen at 11,800 then 11,700 strike.
The Bank Nifty managed to snap its losing streak of the last three trading sessions to give the highest daily close of 155 trading sessions.
The index closed 694.05 points, or 2.88 percent, higher at 24,769.50 to form a bullish candle on the daily scale.
"The Bank Nifty has to hold above 24,500 to witness a fresh move towards 25,200 and higher zones while major support is seen at 24,250 and 24,000 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.Positive setup was seen in Kotak Mahindra Bank, ACC, Nestle India, Colgate Palmolive, Asian Paints, Tata Consumer, Bajaj Finance, Indraprastha Gas, Container Corporation and HDFC Bank while weakness was seen in M&M Financial, PVR, InterGlobe Aviation, ONGC, PNB and TCS, he added.