Mazhar advised traders to buy now and add further of declines towards 10,800 with a stop below 10,770 on closing basis and look for a higher targets beyond 11,000 kind of levels.
The Nifty50 rebounded sharply on Tuesday after losing in previous three consecutive sessions, closing near 10,900 levels driven by technology, banking & financials, FMCG and oil stocks.
The rate cut hope after further fall in retail inflation and rally in Asian markets lifted investors sentiment.
The index, which formed bullish candle on the daily scale, could go above 10,950 levels in coming session, followed by some profit booking, experts said, adding then 11,000 is likely to be hit by end of this month.
The Nifty50 after opening higher at 10,777.55, which was also an intraday high, extended rally as the day progressed and touched a day's high of 10,896.95. The index ended 149.20 points or 1.39 percent higher at 10,886.80.
"Finally Nifty50 registered a decisive breakout from its contracting triangle signalling the end of one corrective structure. As the last leg of fall from 10,870–10,692 (which is wave e of contracting triangle) is reatraced in a lesser span of time i.e in a single day it should act as a self confirmation for completion of corrective pattern there by ushering in a sustainable up move for the index," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said post this breakout pattern target is placed around 11,430 levels where as logical targets based on ratio analysis is at 11,349.
Meanwhile, there can be some hiccups around 10,985 kind of levels but as the index has embarked on a fresh leg of upswing with the current breakout these hiccups should eventually be get cleared paving the way for a sustainable up move beyond 11,000 kind of levels, he added.
Mazhar advised traders to buy now and add further of declines towards 10,800 with a stop below 10,770 on closing basis and look for a higher targets beyond 11,000 kind of levels.
India VIX fell by 3.59 percent to 15.58 levels. Volatility has to cool down further to get a decisive range breakout.
On the option front, maximum Put open interest (OI) is at 10,500 followed by 10,000 strike while maximum Call OI is at 11,000 followed by 10,900 strike.
Meaningful Put writing is at 10,800 followed by 10,900 strike while Call unwinding is at most of the immediate strikes. Option band signifies a higher shift in trading range in between 10,750 to 11,000 zones.
"Nifty index surpassed its falling supply trend line by connecting swing highs of 10,985, 10,923 and 10,870 levels and also given a breakout from its Symmetrical Triangle pattern," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited said.
The index negated its lower highs of last three trading sessions and needs to hold above 10,800 zones to extend its move towards 10,985-11,000 zones while on the downside support exists at 10,777 levels, he added.
Bank Nifty negated its lower highs - lower lows formation of last three trading sessions but comparatively remained rangebound for most part of the session. The index closed 152.50 points higher at 27,400.75, underperforming the Nifty index but formed a bullish candle on daily scale with absence of follow through buying activities.
"Now it has to hold above 27,350 zones to witness an upmove towards 27,500 then 27,750 zones while immediate support exists at 27,150 zones," Chandan Taparia said.
