The Nifty closed in on the 17,500 mark helped by an afternoon rally that pushed the benchmark index 119 points higher on April 24, helped by gains in banking & financial services, FMCG and technology names.
After opening above 17,700, the index remained range-bound in the morning and dropped to the day's low of 17,612. It picked up momentum in the afternoon and rose to the day’s high of 17,754 before closing at 17,743.
It formed a bullish candle with long lower shadow on the daily charts. It also saw a breakout of Bullish Flag formation, which is a positive sign.
If the index stays above 17,700, the swing high of 17,860, seen in the previous week, can be the next resistance, whereas 17,500-17,600 area remains a crucial support for the index, experts said.
"Technically, Nifty witnessed a breakout of the bullish flag formation, where 17,800–17,860 is an immediate resistance zone for the Nifty; above this, we can expect a rally towards the 18,100–18,200 zone," Santosh Meena, Head of Research, Swastika Investmart, said.
On the downside, the 200-day moving average of 17,600 will act as a strong support level, he added.
On the options front, the maximum call open interest was at 17,700 strike, followed by 18,500 and 18,000 strikes, with Call writing at 18,000, 17,800 and 17,900 strikes. The maximum put open interest was at 17,700 strike, followed by 17,600 strike, with put writing at same strikes.
The data indicates that 17,500 is expected to be crucial support, whereas the critical resistance area would be 17,800-18,000.
"The corrective move of the Nifty index has taken support at the 200-day SMA and has swiftly bounced from there. This makes 17,500 a very strong support right now," Rahul Ghose, Founder & CEO, Hedged, said.
The congestion zone, which was between 17,650 and 17,900, has shifted and lies between 17,800 and 18,000. "Until we see a bearish close below 17,500, we can expect the upside to continue," he said.
Banking index
The Bank Nifty also saw a breakout of the Bullish Flag pattern on the daily charts. The index remained in a positive terrain throughout the session, closing 518 points higher at 42,636.
"The Bank Nifty is near the critical supply zone of 42,700–43,000, above this, we can expect a rally towards 43,500 and 44,000 levels. On the downside, 42,000 has become a near-term floor," Meena said.
The broader market also traded higher. The Nifty Midcap 100 and smallcap 100 indices gained 0.4 percent and 0.6 percent.
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