Traders should remain neutral on the index for a day or two and focus on stock-specific opportunities.
After a volatile opening hour, the Nifty50 gained strength and extended gains as the session progressed on April 22, driven largely by the $5.7-billion deal between Reliance Jio and Facebook. Positive European cues amid hopes of the peaking of infections also lifted sentiment.
The index closed near day's high and after red candles in the previous three consecutive sessions, it formed a bullish candle on daily charts, as the closing was higher than the opening level.
The bullish bias will continue till the index holds 8,900 in the coming days, experts say.
Traders are advised to remain neutral on the index for a day or two and focus on stock-specific opportunities.
The Nifty50 opened higher at 9,026.75 and turned volatile for an hour to hit the day's low of 8,946.25, but then gained strength to reach the day’s high of 9,209.75 in late trade. It closed at 9,187.30, up 205.85 points, or 2.29 percent.
"Lack of follow-through to the preceding session's breakdown is hinting at one more attempt by the bulls to clear its logical resistance of 9,390. Hence, as long as the index remains above 8,900 levels, sentiment may remain in favour of the bulls," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
"Once a decisive close is witnessed above 9,400 levels, then a fresh leg of upswing shall unfold with targets placed around 9,950 levels, which is the 50 percent retracement of entire fall from 12,430–7,511 levels. However, weakness shall be expected only on breach of 8,900, with an initial target of 8,450," he said.
The Bank Nifty remained volatile through the day and settled at 19,701.80, up 292.45 points or 1.51 percent, forming a bullish candle on daily charts but underperformed the benchmark index.
"In the near term, 20,200 zone is likely to act as resistance on the upside. If the Bank Nifty fails to cross 21,100 in this phase, it is likely to see sharper downsides, especially once the index breaches below 18,700," Amit Shah, Technical Research Analyst with Indiabulls Securities said.
"We continue to remain cautious as far as the upside is concerned. Overall, we are in a bear market rally, which is likely to get terminated sooner rather than later. We see support at 18,700-18,300, while the resistance is seen at 19,900-20,200," he said.Time to show-off your poker skills and win Rs.25 lakhs with no investment. Register Now!
