If the bulls manage to push and hold the Nifty above 11,256, then the eventual target could be a retest of the recent swing high at around 11,341, say experts.
It was a volatile Thursday but the bulls managed to retain their hold on D-Street. The S&P BSE Sensex climbed above 38,000 while the Nifty50 also touched 11,200.
The S&P BSE Sensex rose 362 points to end the day at 38,025, while the Nifty50 rose 98 points to close at 11,200.
The Nifty50 has been gaining momentum for the past three trading sessions but experts say that a further rally is possible only if the index ends above 11,250-11,256 on a closing basis.
Though it closed in the green, the Nifty50 remained volatile and somewhat indecisive as it signed off the session with a Doji candle.
“It is looking critical for the index to sustain above 11,127 levels in the next trading session to retain a positive bias, as a breach can attract selling pressure on intraday basis with a modest target present in the 11,064 – 11024 zone,” Mazhar Mohammad, Chief Strategist–Technical Research && Trading Advisory, Chartviewindia.in told Moneycontrol.
If the bulls manage to push and hold the index above 11,256, then the eventual target can be a retest of the recent swing-high at around 11,341, he said.
Mohammad added that considering the indecisive formations of the past two sessions, traders should remain cautiously optimistic, with a stop loss below 11,100.
We have collated views of experts on what investors should do on August 7 when the market resumes trading:
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
Markets need to close above 11,200 for the uptrend to continue. If it happens on August 7, it will trigger a rally next week that will take the markets to 11,400-11,500. The support continues to remain around 10,900, which if broken, can slip to 10,700.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.
The Nifty witnessed sharp swings in both directions during the day. The pullback that started a couple of days ago got stretched further on the upside. The index tapped at the 78.6 percent retracement of the previous fall, which is near 11,240.
The key Fibonacci level induced bears into action to some extent. Structurally, the pullback seems to be in its terminal phase and is expected to be followed by the next leg down, which will push the Nifty below the swing low of 10,882.
On the other hand, any attempt to retest the 78.6 percent retracement mark is likely to attract a fresh round of selling
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After sailing smoothly on the upside forming few higher bottoms in the past couple of months, the Nifty struggled to move up this time after the formation of swing low at 10,882 on August 3.
Apparently, this market action can signal a higher level of weakness by forming a lower top. But, short-term uptrend strength remains intact and one may expect a retest of upper 11,350 level.
A sustainable move above 11,225 is likely to provide a smooth ride towards the recent swing highs. The Nifty's short-term trend continues to be positive with volatile movement.
Some more upside is left in the market and the Nifty is expected to reach the upper resistance area of 11,350 by next week. Immediate support is placed at 11,100. The stop loss for positional long trades needs to be placed at 10,900 levels.
Sumeet Bagadia, Executive Director at Choice Broking
In the backdrop of weekly expiry and the RBI's monetary policy, the Nifty made an intraday high of 11,277 and declined to 11,126 to recover at the end and settle at 11,200 with a gain of 98 points.
The Bank Nifty closed at 21642 with a gain of 132 points. On charts, the Nifty is looking good as it has been trading in an upward rising channel formation on a smaller time frame, which suggests an upside movement.
Support for the Nifty is seen at 10,900-11,050 level, while upside resistance comes at 11,250-11,350. As the index ended above 11,200, the market is likely to remain highly volatile in the coming sessions.
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