In case if Nifty manages a close above 10,930 then this rally shall initially get expanded upto 11,011 kinds of levels, Mazhar Mohammad of Chartviewindia.in said.
The Nifty50 after early trade volatility gained strength and closed on a strong note on Monday, driven by global optimism after substantial progress in bilateral talks between the US and China. The approval of GST council to lower the tax rate on real estate project also lifted sentiment.
The index continued its positive momentum for fourth consecutive session and formed bullish candle on daily charts.
The index surpassed its 50 DEMA which indicates that bulls are back, but bulls need to surpass 10,930 levels to demonstrate further strength, experts said.
The Nifty50 started off day on a positive note at 10,813.25, but slipped into the red to touch a day's low of 10,788.05 in early trade. However, the index immediately managed to claw back and gained strength as the day progressed, to hit an intraday high of 10,887.10. It closed 88.40 points higher at 10,880.10.
"Nifty50 registered a decent bullish candle suggesting it has resumed its upmove after a brief pause witnessed in last Friday's session. However, the said index is fast approaching its critical resistance point of 10,930 levels which bulls need to conquer to demonstrate further strength," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said certain momentum oscillators on lower time frame charts are reaching overbought levels after this four days of consecutive positive close. Hence, weakness in Nifty shall materialise if this index closes below 10,788 levels going forward.
Considering the fact that Nifty is about to negotiate its critical resistance point on short term charts placed around 10,930 accompanied with overbought nature of momentum oscillators it looks prudent on the part of traders to book profits and wait for a strong close above 10,930 to re-enter, Mazhar advised.
In case if Nifty manages a close above 10,930 then this rally shall initially get expanded upto 11,011 kinds of levels, he said.
India VIX fell by 0.60 percent to 15.35 levels. Gradual decline in VIX indicates short term stability in the market.
On option front, maximum Put open interest (OI) is at 10,700 followed by 10,800 strike while maximum Call OI is at 11,000 followed by 11,100 strike.
Meaningful Put writing is at 10,800 followed by 10,750 strike while Call unwinding is at all the immediate strikes.
Experts said option band signifies a higher shift in trading range between 10,777 to 10,985 levels.
"Nifty index has been forming higher highs from last four trading sessions and supports are gradually shifting higher. Now it has to continue to hold above 10,820 zone to extend its move towards 10,929 then 10,985 zones while on the downside support exists at 10,777 levels," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Bank Nifty managed to hold 26,850 zone in the last session followed by a Bullish Belt Hold candle on daily scale. It surpassed and closed above immediate hurdle of 27,000 zones and given a highest daily close in last ten trading sessions. The index closed at 27,159.25, up 291.70 points from previous settlement.
"Now it has to hold above 27,000 zone to extend its move towards 27,350 then 27,500 while on the downside support exists at 26,850 levels," Chandan Taparia said.
