Nifty50 saw a gap-up opening at 18,097. It extended gains to kissing distance of the 18,200 level, but profit booking led to some drawdown of gains. Eventually the index closed at 18,161, up 169l points or 0.94 per cent.
“Going forward, Wednesday’s bullish gap area of 18,050-18,008 should act as a critical support in the short term. Moreover, the strong surge is looking like some kind of consolidation breakout on the line chart after several days of sideways move,” said Mazhar Mohammad, Chief Market Strategist at Chartviewindia.in.
He, however, cautioned that owing to a long weekend, traders may prefer to book profit in the next session. “Such dips, preferably towards the 18,100 level, can be considered as an opportunity to create fresh long positions in the index with a stop loss below the 18,000 level on a closing basis,” he said.
Despite the confident rally, India VIX climbed nearly 20 per cent to 16.10 level, reflecting some cautiousness among the traders.
“The index has shifted its immediate support to the 18,100-18,040 zone. So existing longs can be held, while keeping the trailing stop loss below the 18,000 mark,” said Rohit Singre, Senior Technical Analyst at LKP Securities.
He said any dip near the above-mentioned support zone will be a fresh buying opportunity for overall targets in the 18,300-18,500 zone.
In the medium term as well, the bullish momentum is intact.
“Nifty remains in a medium-term uptrend for the 18,600-18,800 zone. We would advise reducing aggression above the 18,600 level. For the October series, the momentum remains strong above the 17,600 level and buying on dips is advisable,” said Sahaj Agrawal, Head of Research for Derivatives at Kotak Securities.
“Cement stocks provide value entry while Private banking and metals are expected to gain momentum,” he said.
