The Nifty50 continued to trade higher after early volatility and closed at a new high again on December 17 as global cues remained positive on the US Fed's decision to keep rates unchanged and assurance of continued support.
The index closed above 13,700 and formed a small-bodied bullish candle that resembled a Spinning Top pattern on the daily charts. A Spinning Top is often regarded as a neutral pattern that suggests indecisiveness in the market. It can be formed in an uptrend as well as a downtrend.
The volatility below 20 levels indicated that the bulls are still in control of Dalal Street. India VIX was marginal down by 0.22 percent from 19.20 to 19.15.
Experts say the positive bias is likely to continue in the coming sessions amid volatility and the index may march towards the 14,000-mark.
For the time, as sell signals on technical indicators and oscillators of lower time-frame charts are getting whipsawed, Mazhar Mohammad of Chartviewindia.in advised traders to look only for long side opportunities until some strong reversal signs are visible.
The Nifty50 started off higher at 13,713.55 and turned volatile to hit the day's low of 13,673.55 but immediately rebounded. It extended gains to hit a fresh record high of 13,773.25 though there was some marginal profit-taking in the late trade. The index rose 58 points to 13,740.70.
"The bulls continued their heroic efforts by scaling new peak day after day. However, trading range continued to remain narrow with 100 points with indecisive formations for last five trading sessions," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
If the bulls fail to sustain above 13,673 in the next session, then some pause can be expected but if they manage to push the index beyond 13,773, then a target of 13,900–14,000 can be expected.
On the downsides, if the index closes below 13,673 then it may extend the weakness initially towards 13,522 levels.
The options data indicated that the trading range has been shifted higher from 13,400-13,800 to 13,500 to 14,000 for the coming sessions.
On the option front, maximum Put open interest was seen at 13,000 followed by 13,500 strike, while maximum Call open interest was at 13,000 followed by 13,500 strike. Marginal Call writing was seen at 14,100 then 14,000 strike, while Put writing was seen at 13,500 then 13,700 strike.
The Bank Nifty opened positive at 30,791.20 but remained consolidative in a 300-point range in between 30,643.90 and 30,945.20. The index gained 148.60 points at 30,847 and formed a small-bodied bullish candle on the daily scale as buying was visible at lower zones but at the same time, the hurdle is intact at higher levels.
"The Bank Nifty has to continue to hold above 30,500 to witness an upmove towards 31,000 then 31,200, while on the downside, supports are seen at 30,350 then 30,200 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Positive setup was seen in Jubilant Foodworks, Page Industries, SRF, Berger Paints, HDFC, Bajaj Finance, Bharat Electronics, Divis Labs and TCS while weakness was seen in PNB, BOB, RBL Bank, Maruti Suzuki, PVR and Petronet LNG, he added.