In a roller-coaster session, the Nifty gained strength in late trade to closed 69.5 points higher on June 10 despite weak global cues, driven by banking & financials. It had lost over a percent in the previous session.
The index closed above 10,100 and formed a small bullish candle that resembled an Inside Bar pattern on daily charts as the Nifty traded within the previous day's range. It also indicated that indecisiveness among market participants after a sharp rally in previous two weeks.
The index will in a consolidation mode unless it decisively breaks 10,000 on the lower side and 10,300 on the higher side, experts say.
Considering the lackadaisical movement of the Nifty in the last couple of trading sessions, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, advised traders to remain neutral till a breakout in either of the direction.
The Nifty50 opened higher at 10,072.60 and remained in more than 100 points range for the day. The index hit an intraday high of 10,148.75 and low of 10,036.85, before closing at 10,116.20, up 69.50 points, or 0.69 percent.
“Considering the last six days of price behaviour it appears that Nifty is awaiting for a breakout in either of the directions and subsequent move is going to be very swift in the direction of the breakout," Mohammad said.
At present, both the price chart and the short-term momentum oscillators are favouring the bears in the near term. Hence, unless the Nifty registers a strong close above 10,300, the bulls should not get an extended lease of life, he said.
If the index manages a breakout above 10,300, then the rally would get extended towards 10,750, Mohammad said.
The weakness would be confirmed once the bears manage to push the index below the psychological support of 10,000. "In that scenario, the Nifty should head to test its critical support zone of 9,700–9,600.”
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas, said the hourly chart showed that the junction of the 40-hour exponential moving average and the hourly lower Bollinger Band acted as a support for yet another day.
"Thus the swing low of 10,021 now becomes a crucial support and holds the key for further extension on the upside," he said.
On the higher side, the bulls need to take out the resistance zone of 10,300-10,328 to stretch towards 10,550, which is 61.8 percent retracement of the January - March fall, Ratnaparkhi said.
The broader markets also gained momentum, with the Nifty Midcap index rising over a percent and the smallcap up was up half a percent.
The Bank Nifty was also volatile but remained on the higher side for most part of the day. The index opened with a moderate gap up at 20,760.95 and hit an intraday low of 20,671.55.
It gained momentum in late trade to hit the day's high of 21,251.45 and closed above the 21,000-mark. It gained 375.20 points, or 1.81 percent, at 21,100.10 and formed a bullish candle on daily charts.
As the index moved within the trading range of previous session, it also formed the Inside Bar pattern on the daily charts.