Technical View | Robust rally looks likely if Nifty holds 20,000 in near term

The index hit a day's high of 20,008.15 in late trade and ended at new closing high of 19,996.30, up 176 points, continuing the upmove for seven days in a row

Finally, the Nifty50, as expected, hit the psychological 20,000 mark on September 11, as all sectors contributed to the rally following the G20 Summit, which bolstered investors' sentiment.

Hence, if the index manages to get back and sustain above the 20,000 mark in coming sessions, then the move towards 20,500 can be possible, while the immediate support shifted higher to 19,800, followed by crucial support at 19,700-19,500 area, experts said.

The Nifty50, in the opening itself, has seen a decisive breakout of horizontal resistance trendline adjoining highs of July 27 and September 8, and sustained above the same throughout the session with long bullish candlestick pattern formation, though there was lower than average volume. The index hit a day's high of 20,008.15 in late trade and ended at new closing high of 19,996.30, up 176 points, continuing the upmove for seven days in a row.

"On the weekly chart, we observe a faster retracement on the upside (upside retracement within three weeks against six weeks of previous declines). This is a positive indication," Nagaraj Shetti, technical research analyst at HDFC Securities said.

He feels the short-term trend of Nifty continues to be positive. A sustainable move above the 20,000 mark is expected to pull Nifty towards the next overhead resistance of around 20,450 levels (38.2 percent Fibonacci extension), he said, adding immediate support is placed at 19,850 levels.

The Option data suggested that the 20,100-20,200 can be immediate resistance for the Nifty50, with support at 19,900-19,800 levels.

On the Options front, the maximum Call open interest was at 20,000 strike followed by 20,100 strike and 20,200 strike with meaningful Call writing at 20,100 strike then 20,000 strike and 20,500 strike, while the maximum Put open interest was seen at 19,900 strike followed by 19,500 strike with Put writing at 19,900 strike and then 20,000 strike.

Bank Nifty

The Bank Nifty continued its uptrend for the third consecutive session, surpassing 45,500 levels now after a breakout of the horizontal resistance trendline during the day, and formed a bullish candlestick pattern on the daily scale. The index climbed 414 points to 45,571.

"Bank Nifty has also witnessed positive price action and is on the way to retest the recent swing high of 46,400. The index has been a laggard and hence a divergence is visible among the sectoral indices," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.

He feels sooner rather than later it is likely to align with the benchmark and expects the positive price action to continue. "Momentum indicators on the daily and hourly time frames are in sync with the price action and hence we are likely to a sustained upmove," he said.

Broader markets also maintained their upward journey, with the Nifty Midcap and Smallcap 100 indices rising more than 1 percent each, while the India VIX, the fear index, jumped by 5.26 percent to 11.35 levels.

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