After a small gap-up opening, the Nifty50 gradually extended its northward journey as the day progressed and closed near the day's high with nearly 450 points gains in a single day on August 30, ahead of June FY23 quarter GDP data tomorrow and monthly auto sales data due later in the current week. The resilient Indian economy compared to global peers in the current uncertain global environment also boosted sentiment.
In fact, the index has registered a more-than-one-week high despite uptrend in oil prices, and formed a strong bullish candlestick pattern on the daily charts, indicating a healthy signal for the move ahead. Also, it decisively respected the previous day's low point of 17,166. Hence, if the index sustains its northward journey and gives a decisive close above July 19's high of 17,992, further bullish bias can push the index above the psychological 18,000 mark, experts said.
The momentum in broader markets remained strong on healthy breadth as about three shares advanced against a declining share on the NSE. The Nifty Midcap 100 index gained 2 percent and Smallcap 100 index rose 1.3 percent.
The contribution in Tuesday's rally was seen from every sector, with Bank, Financial Services and Realty climbing the maximum with more than 3 percent gains.
The Nifty50 opened higher at 17,415 and extended an uptrend throughout the session to hit a day's high of 17,778. The index settled at 17,759, up 446 points.
"Post the mid-week holiday, the global markets could dictate the market moves on the weekly expiry day but the data hints at positivity. The supports for the coming session are placed around 17,645 and 17,515 while resistances are seen around 17,890 and 18,020," Ruchit Jain, Lead Research at 5paisa said.
He advised traders to look for stock-specific opportunities within the sectors which have shown signs of outperformance.
In the derivatives segment, the Nifty witnessed long formations and the Call writers were forced to cut their positions. In fact, as the market rallied higher, Put writing was seen in 17,600 and 17,500 strikes which would now be seen as immediate support, the market expert said.
We have seen the maximum Call open interest at 18,000 strike followed by 19,000 and 18,500 strikes, with Call writing at 18,000 strike followed by 18,200 and 18,500 strikes, while the maximum Put open interest was seen at 16,500 strike, followed by 17,000 and 17,500 strikes, with Put writing at 17,500 strike and then 17,700 and 17,400 strikes.
The volatility index India VIX corrected by nearly 6 percent to 18.70 levels, making the trend favourable for bulls. If the VIX drops further below the 18 mark, then there could be more stability in the market, experts said.
Bank Nifty opened with 240-point gains at 38,517 and made a strong move as the day progressed to hit an intraday high of 39,606. The banking index rallied 1,260 points to close above the median of July 19, when the beginning of the recent correction was seen, at 39,537 and formed a robust bullish candlestick pattern on the daily charts.
"The index surpassed the immediate hurdle of 38,500 which will now act as strong support on the downside. The index on the upside indicates targets of 41,000-41,500 where the earlier major sell-off of the index was seen. The index remains in a buy-on-dip mode as long as it holds the support of 38,500 on the downside," Kunal Shah, Senior Technical Analyst at LKP Securities said.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.