Chandan Taparia of Motilal Oswal Financial Services said Nifty index has to continue to hold above 10,985 zone to extend its move towards 11,118 then 11,200 zones.
The Nifty50 ended dull trading session on a flat note on March 7, taking a breather after the recent rally, and formed bearish candle, which resembles a 'Hanging Man' kind of formation on the daily charts.
Sectors such as Bank Nifty, FMCG traded in the green whereas IT, Media, Metal and Pharma lost ground. The broader markets closed in the red, underperforming benchmark indices.
The index managed to hold above 11,000 zone for second consecutive session amid volatile trade, but it needs to decisively surpass 11,100 levels for strong upmove in the market going ahead, experts said.
The Nifty50 opened marginally higher at 11,077.95 and remained consolidative in narrow range of 30 points in first half of the session to hit a day's low of 11,027.10, but witnessed some momentum in later part as it extend its gains and hit an intraday high of 11,089.05. The index closed 5.20 points higher at 11,058.20.
"Once again bulls appears to be struggling to hold on to their ground firmly above 11,000 levels as Nifty50 registered Hanging Man kind of formation pointing towards weakening momentum in the near term," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said though bulls managed to survive above 11,000 levels for two sessions in a row, the price action of these two days is not that encouraging as trading remained narrower with almost indecisive formations.
Hence, to keep up the momentum intact bulls need a strong close in next session perhaps above 11,100 levels, he added.
Menawhile if Nifty slips below 11,027 levels in next session then intraday weakness may kick in, according to Mazhar. Hence, he advised traders to remain cautiously optimistic with a tight stop below 10,990 levels.
India VIX fell by 2.03 percent at 15.29 levels.
"Now, VIX has to continue to hold below 16-15 zones to get the smooth ride in the market," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services told Moneycontrol.
On option front, maximum Put open interest (OI) is at 11,000 followed by 10,800 strike while maximum Call OI is at 11,500 followed by 11,200 strike.
Put writing is at 11,000 followed by 10,800 strike while Call writing is at 11,200 followed by 11,300 strikes.
Option band signifies a trading range in between 10,888 to 11,200 zones, experts said.
"Nifty index has to continue to hold above 10,985 zone to extend its move towards 11,118 then 11,200 zones while on the downside support exists at 10,985 then 10,929 zones," Chandan said.
Bank Nifty relatively outperformed the benchmark index and witnessed strong momentum in later part of the session to extend its gain towards 27,800 zones. The index closed at 27,764.60, up 138.95 points from previous settlement.
"It continued its formation of higher highs – higher lows from previous four trading sessions and formed a bullish candle on daily scale," Taparia said.Now it has to continue to hold above 27,500 zone to witness an upmove towards 28,000 zone while on the downside support exists at 27,350-27,200 zones, he added.