The Nifty ended higher for the sixth session in a row on May 2, supported by gains in technology, auto, oil & gas, banking & financial services names.
The index opened higher at 18,125, touched an intraday high of 18,180 and with 83 points, or 0.5 percent, higher at 18,148, forming a small-bodied bullish candlestick on the daily timeframe. It made higher tops and higher lows for the sixth day in a row.
Even the momentum indicator relative strength index 14) at 73 on the daily scale remained bullish, while MACD on the weekly charts have gave a clear positive crossover above the line.
Hence, 18,200 is expected to be next hurdle for the Nifty followed by 18,300-18,500. The psychologically vital 18,000 mark will act as a support followed by 17,900, experts said.
"The way markets behaved in the last couple of sessions of the previous week, it has certainly lifted our markets in a much safer terrain. The Nifty is now about to enter a crucial cluster of 18,200–18,500," Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One, said.
He, however, advised traders against being complacent because surpassing 18,200–18,250 would be a daunting task for the bulls.
Some profit booking or a time consolidation cannot be ruled out ahead of the next leg of the rally, Chavan said, adding the undertone remains bullish, and the immediate base had shifted higher to 18,000–17,900.
On the weekly options front, the maximum Call open interest was at 18,200 strike, followed by 18,300 and 18,500 strikes, with meaningful Call writing at 18,200 strike, then 18,300 strike. The maximum Put open interest was at 18,000 strike, followed by 17,800-17,900 strikes, with Put writing at 18,100 strike, then 18,200 strike.
The trading range for the Nifty is expected to be 17,800-18,500.
Banking index
The Bank Nifty opened higher at 43,395 and moved in a zig-zag manner in a 150-200 point range. The index closed at 43,352, up 118 points and again underperformed the Nifty.
It has failed to cross 43,500, while the support based buying was seen at 43,250 levels. It formed a small bodied candle on the daily scale and higher highs from eighth straight session.
"The Bank Nifty has to continue to hold above 43,250 levels to make an up move towards 43,500 then 43,750 levels, whereas on the downside support is intact at 42,750 then 42,500 levels," Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services, said.
Volatility spiked during the session but remained low overall. India VIX, which measures the expected volatility in the Nifty over the next 30 days, was up by 8.67 percent to 11.90 levels.
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