According to Mazhar, bears may gain upper hand if Nifty closes below 11,000 levels which can damage the confidence of bulls about the sustainability of this rally.
The Nifty50 closed listless session marginally lower on Friday, but managed to hold 11,000 levels for third consecutive session despite sharp fall in global peers on growth concerns.
The index formed small bearish candle, which resembles a Doji kind of formation on the daily charts while it rallied 1.5 percent during the week and formed bullish candle on the weekly scale.
A 'Doji' is formed when the index opens and then closes approximately around the same level. However, it remains volatile throughout the trading day which is indicated by its long shadow on either side. The candle appears like a cross or a plus sign.
The consolidation despite global weakness and after a rally indicated that the market may resume its upward journey again in coming sessions, experts said, adding 11,200 levels could be the next target to watch out for.
The Nifty50 after opening marginally lower at 11,038.85, remained in the range throughout the session but did not break psychological 11,000 levels. The index touched an intraday high of 11,049 and low of 11,008.95, before closing 22.80 points lower at 11,035.40.
"Nifty50 registered yet another a listless trading session before signing off the week with a Doji kind of indecisive formation after remaining in an extremely narrow range of 40 points," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
However, he said on weekly charts a decent bullish candle is visible which resulted in a clean breakout above the 14-week rangebound move on weekly line chart (closing price chart) which can still put bulls in a advantageous position despite weak price behaviour of last three sessions on daily chart, he said.
Hence, as long as Nifty sustains above 11,000 levels bulls can read last 3 sessions of price behaviour as a temporary pause in the current upswing and remain optimistic and look for initial targets of 11,200 levels, he added.
According to Mazhar, bears may gain upper hand if Nifty closes below 11,000 levels which can damage the confidence of bulls about the sustainability of this rally.
Nevertheless short term traders should remain on long side with a stop below 10990 on closing basis, he said.
India VIX fell by 2.29 percent to 14.94 levels. Now, VIX has to continue to hold below 16-15 zones to get the smooth ride in the market.
On option front, maximum Put open interest (OI) is at 11,000 followed by 10,800 strike while maximum Call OI is at 11,500 followed by 11,300 strike.
Minor Put writing is at 10,900 strike while Call writing is at 11,100 followed by 11,300 strikes.
Option band signifies a trading range in between 10,888 to 11,200 zones, experts said.
"The Nifty index formed a Doji Candle on daily scale while Bullish Candle on weekly chart which implies that decline is being bought into the market," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited said.
Now the index has to continue to hold above 10,985 zones to extend its move towards 11,118 then 11,200 zones while on the downside support exists at 10,985 then 10,929 zones, he added.
