The Nifty50 rebounded in the afternoon and closed flat with a positive bias on May 12, driven by banking & financial services, auto and select FMCG stocks. However, the selling pressure in metal, pharma and select IT stocks capped gains.
The index started off trade lower at 18,274 and fell up to 18,195, but recouped all the losses in the afternoon to remain in positive terrain and hit an intraday high of 18,343. It rose 18 points to 18,315 and formed small bodied bullish candlestick pattern with a long lower shadow on the daily charts, as buying was visible at lower levels.
During the week, the index gained 1.36 percent and formed a bullish candle on the weekly scale, making a higher high formation for the seventh consecutive week, which raises hopes that the Nifty50 can reclaim 18,400 levels as long as it stays above 18,200 levels. If the index sustains above 18,400 levels, then 18,600 can be the next possible target, experts said.
An important technical indicator, the relative strength index (RSI) showed a bullish crossover, indicating potential upward momentum in the market.
"Closing above the significant level of 18,200, the Nifty sustained its position, which is considered a positive sign for the market. As long as the index remains above this level, the overall trend is expected to remain positive," Rupak De, Senior Technical Analyst at LKP Securities said.
Looking ahead, he feels it is important to keep an eye on the resistance level at 18,400.
"If the Nifty manages to surpass this level, it could further reinforce the positive trend. However, if the index falls below the support at 18,200, it may signal a potential weakness in sentiment and raise concerns about the ongoing bullish outlook," Rupak said.
On the Option front, the maximum Call open interest was at the 18,300 strike followed by the 18,500 strike and the 18,800 strike, with Call writing at the 18,800 strike then 18,300 and 18,500 strikes, whereas the maximum Put open interest was at the 18,200 strike, followed by 18,300 strike and 18,000 strike.
The above Option data indicated that the Nifty50 may gradually be inching towards 18,500, while 18,200 is expected to be near term support level, followed by the 18,000 mark.
Bank Nifty opened slightly lower at 43,447 and after an initial dip towards 43,333 levels, it recovered gradually from lower zones and extended its momentum towards 43,900 at the latter part of the session. It formed a big bullish candle on the daily scale as good momentum was seen across the banking space and closed with decent gains of 318 points at 43,794.
The index has formed a bullish candle on daily as well as weekly charts. It has continued its formation of higher highs - higher lows from the past seven weeks as buying is visible at lower zones.
The index has given the highest-ever weekly close and relatively outperformed the broader market. Now, it has to continue to hold above 43,600 levels to make an up move towards 44,000, than its previous all-time high of 44,151 levels, while on the downside support is expected at 43,500 then at 43,333 levels," Chandan Taparia, Senior Vice President | Analyst-Derivatives at Motilal Oswal Financial Services aid.
India VIX dropped for the first time in six consecutive sessions, falling 2.74 percent to 12.85 levels, from 13.22 levels and giving comfort to bulls for buy on decline stance in the market.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.