Post elections results if the market fails to sustain above 10,750 levels on closing basis then there will be a bright chance of resuming downtrend with initial targets of 10,450, Mazhar said.
The Nifty50 rebounded for the first time in last four consecutive sessions and settled the trade near 10,700 levels on Friday, tracking recovery in global peers. But traders remained cautious ahead of actual results of five state elections due next week.
The index formed bullish candle which resembles an 'Inside Bar' kind of pattern on the daily charts and bearish candle on the weekly scale.
An inside bar pattern is formed when index trades within the high and low range of the previous day (Thursday) which means that the index traded inside the trading range of the previous day. It is a two candlestick price pattern.
The volatility is likely to continue in coming session even after exit polls and 10,750 is expected to remain crucial level to watch out for, experts said.
The Nifty50 after opening higher turned volatile, but managed to gain some strength in last hour of trade to hit an intraday high of 10,704.55. The index remained positive throughout the session, closing 92.50 points higher at 10,693.70.
"Nifty50 registered an inside bar kind of formation as Friday's range is confined to the limits of preceding day's trading session," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said technically speaking, as Nifty50 registered a decisive breakdown below its 200-day moving average with a gap down on Thursday the said index shall remain under pressure unless it closes above 10,748 levels and weakness shall get extended on breach of 10,588 levels.
Having said this, it is also equally important to note that market is staring at an event and trend for next session is likely to get influenced by its outcome, he added.
Hence, he advised traders to focus on a larger picture and maintain a bullish stance only on a fresh breakout above 10,950 levels on closing basis.
Post event if the market fails to sustain above 10,750 levels on closing basis then there will be a bright chance of resuming downtrend with initial targets of 10,450, Mazhar said.
India VIX fell by 3.37 percent to 18.65 levels. On the option front, maximum Put open interest (OI) was seen at 10,000 followed by 10,200 strikes while maximum Call OI was seen at 11,000 followed by 11,500 strike.
Call writing was seen at 11,200 followed by 11,100 strike while Put writing was seen at 10,500 followed by 10,600 strike. Option band signifies a trading band between 10,550 to 10,850 zones.
"The Nifty index has managed to respect its previous day's low which indicates that decline is being bought into the market," Chandan Taparia, Associate Vice President | Analyst-Derivatives, Motilal Oswal Financial Services said.
Now till it holds above 10,650 zones it could extend its gains towards 10,777 and then 10,850 zones while on the downside crucial support is seen at 10,600 levels, he added.
Bank Nifty erased previous day's losses and witnessed buying interest for the most part of the trading session. It has also negated its formation of lower highs-lower lows and rallied more than 400 points intraday.
The index closed 396 points higher at 26,594.30 and formed a 'Bullish Belt Hold' on daily scale which implies that buying was visible at lower levels.
"Now it has to surpass and hold above 26,666 to extend its gains towards 27,000 and then 27,250 while on the downside supports are seen at 26,500 and then 26,350 zones," Chandan Taparia said.
