NEW DELHI: The Nifty on Thursday made a decisive break above its 200-day moving average and got past its broader range of 10,489-10,775. The index formed a small bullish candle on the daily chart.
Thursday marked the third day of higher high and higher low formation for the index. Market breadth improved too. The index could eye 11,000 level in coming sessions, say analysts.
The index has completed its 50 per cent retracement of entire down leg from 11,760 to 10,004 levels. It also managed to close above 200-day SMA on a closing basis, indicating a bullish breakout.
Rajesh Palviya, Head – Technical & Derivatives Analyst, Axis Securities, expects the index to now face resistance in 10,900-10,950 range. He sees 10,830 as intraday support for the index.
Aditya Agarwala, Technical Analyst, YES Securities, expects the index to drift towards 10,915-11,120 if it manages to move above 10,880 level. However, failure to trade above 10,880 can trigger profit booking to levels of 10700, he said.
For the day, the Nifty rose 129.85 points, or 1.21 per cent, to 10,858.70. Analysts noted that the index's gains over the four sessions are supplemented by surge in oil, which does signal higher levels in coming days.
The bulls also managed to overcome the daily upper Bollinger Band on closing basis and post a fourth consecutive positive daily close.
“In terms of the wave structure, the index is in Wave C of the pullback and can target 11,000-11,140. The broader market indices, however, are still in the consolidation phase. The market sentiment will get a boost once other indices join the party,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.
Sameet Chavan of Angel Broking noted that a breach of any major resistance with an upside gap is called a Breakaway Gap and is considered as a sign of strength. The expert expects the ongoing rally to extend immediately towards 10,920-11,000 range.