The Nifty50 is likely to inch towards the 19,000 mark first before any sort of substantial consolidation and correction, experts said. Supports are at the 18,600 and 18,500 levels.
Dalal Street's upward trend persisted for the eighth consecutive session, which helped the Nifty50 index close above the 18,800 level for the first time on December 1 (the weekly expiry day) amid encouraging global indications. Investor confidence was boosted by the US Fed's suggestions that future rate hikes will be modest and by positive economic data points.
On the daily charts, the index formed a bearish candle because the closing price was lower than the opening price, but higher highs persisted for a seventh day in a row, and both the momentum oscillator RSI and the momentum indicator MACD continued their upward trend on both the daily and weekly time frames.
Because of this, experts say, the Nifty50 may get closer to the 19,000 mark before experiencing any sort of significant consolidation or pullback, with supports at 18,600 and 18,500 levels.
The Nifty50 reached an intraday record high of 18,888 before beginning the day with gains of more than 100 points at 18,872. The index did experience some profit taking as a result of briefly overbought positions, but it continued to trend upward and eventually closed at a record high of 18,812.50, up 54 points.
"The upward price movement is being supported by an expansion in the upper Bollinger bands on an hourly and daily basis. The index's overall structure indicates that it can maintain its upward trend and move toward the short-term goal of 19,000, "said Gaurav Ratnaparkhi, Sharekhan by BNP Paribas' Head of Technical Research.
The zone between 18,700 and 18,600, on the other hand, will serve as a support according to the idea of role reversal, Ratnaparkhi stated.
The option data also showed that the important barrier for the Nifty50 can be at 19,000, which has the highest open interest, while the support is set at the 18,500 strike, which is anticipated to be the index's range in the upcoming sessions.
Maximum Call open interest was at strike 19,000, which was followed by strike 20,000 and strike 19,500. Maximum Call writing was at strike 19,400, which was followed by strike 19,800 and strike 18,900. Maximum open interest on the put side peaked at 18,500 strike, then dropped to 18,000 strike, with writing at 18,500 strike and then 18,300 strike.
The volatility index India VIX decreased by 3.24 percent to 13.36 levels, providing fresh support for the bulls, possibly in response to growing indications that the Fed will proceed with a gradual rate hike.
Bank Nifty began trading over the key resistance level of 43,500 with gains of almost 300 points and reached a record high of 43,515. Overall, the index spent the majority of the session trading in a range of 300 points on the higher side until settling at 43,261 with just 30 point gains.
On the daily charts, the banking index has produced a bearish candle that partly resembles a Bearish Belt Hold pattern, although higher highs have persisted for the third session in a row.
"The index must close above the threshold of 43,500 on an upside basis for the upward movement to restart. The undertone is still optimistic, and a buy-on-dip strategy should be maintained with good support in the range of 43,000 and 42,800 "Senior Technical Analyst at LKP Securities, Kunal Shah, stated.
The Nifty Midcap 100 index increased by 0.77 percent, and the Smallcap 100 index increased by 0.4 percent, continuing the broader markets' upward trend for another another session.
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