Analysts said the index has come out of a range and some more upside is possible. They, however, expect Nifty50 to see strong resistance in the 18,200-18,400 range.
The index has given its highest daily close of the last 38 sessions, said Chandan Taparia of Motilal Oswal Securities, who said a hold above 17,950 should help the index to move towards 18,200 and 18,400 levels. Support for the index has shifted higher to 17,850 and 17,777 levels, he said.
The 50-pack index seems to have emerged out of the minor consolidation range of 17,950-655 levels, said Mazhar Mohammad of Chartviewindia.in. He said if Nifty50 sustains above 17,879 level, it should head higher towards its logical target of 18,165 which is also close to its interim top of 18,200 level.
“That said, certain critical momentum oscillators are still in sell mode despite this recovery attempt, hinting at some sort of caution. In case if Nifty50 slips below 17,879, it may drag towards the 17,655 level. For time being traders can continue their long side bets with a stop below 17,870 level,” he said.
For the day, the index closed at 18,003.30, up 190.60 points or 1.07 per cent.
Manish Shah said the index came out of a three-day range and has now approached the resistance at 18,150-18,200 where there could be a corrective decline.
“For longer-term investors, it is not much of an issue but there could be some opportunity for players who are looking at reversion to the mean trades. For now, there are no signs of a corrective decline,” Shah said.