Mazhar Mohammad of Chartviewindia said in case if Nifty fails to sustain above 11,920 then it can once again slip into corrective and consolidation phase
The Nifty50 after opening higher extended gains gradually as the day progressed and ended at record closing high on June 3 despite weak Q4 GDP data and global trade tensions.
The hope of rate cut and liquidity measures from RBI, strong rally in auto shares despite weak sales in May, fall in oil prices and US bond yields, and stronger rupee lifted market sentiment.
The index managed to give the breakout from its consolidation band of 11,800 to 12,041 after five trading sessions and closed above its psychological 12,000 level for the first time to form strong bullish candle on daily charts. But weak market breadth is a cause of concern, experts said, adding traders can stay bullish with a stop loss below 11,920.
India VIX fell 0.64 percent to 15.96.
The Nifty50 opened higher at 11,953.75 and gradually gathered momentum to hit a record high of 12,103.05 in late trade. The index rallied 165.70 points or 1.39 percent to close at 12,088.50.
"Nifty50 appears to have resumed its upswing after a brief consolidation for a couple of sessions as it went on to hit life-time highs with a strong bullish candle above its psychological hurdle of 12,000. However, this new high is coming on the back of negative advance-decline ratio which can be a cause for concern going forward," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said Nifty needs a fresh breakout on long term charts with a sustainable close above 12,224, pointing towards limited upsides from current levels, which will then open up bigger targets.
Meanwhile, as momentum is favouring the bulls, short term traders can remain bullish on Nifty with a stop below 11,920 and look for a modest target of 12,200, he advised.
Mazhar Mohammad said in case if Nifty fails to sustain above 11,920 then it can once again slip into corrective and consolidation phase.
For Nifty options, maximum Put open interest (OI) was at 11,500 followed by 11,000 while maximum Call OI was at 12,500 followed by 12,000.
Put writing was seen at 11,800 and 12,000 while Call writing was seen at 12,400 and 12,300.
Option data suggests a shift in the higher end of the trading range to 11,750-12,250, experts said.
"Now Nifty index has to hold above 12,000 to extend its gains towards new life high territory of 12,250 while on the downside support is seen at 12,000 then 11,880," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Bank Nifty managed to recover from lower levels of 31,300 and gradually extended its gains towards 31,650. The index closed 278.25 points higher at 31,653.65 and formed an Inside Bar Candle on the daily scale but traded in a broader range of 400 points most part of the session.
"Now Bank Nifty has to hold above 31,313 to witness an up move towards 31,783 then 32,000 while major support exists at 31,150 then 31,00," Chandan Taparia said.
