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The bulls on Dalal Street took the Nifty higher for the second straight session on Wednesday.
During the day, the index not only crossed its short-term 20-day moving average, but also went higher to kiss the 200-DMA at 10,752 level.
The index hit an intraday high and low of 10,752 and 10560, respectively, before closing just shy of the 200-DMA at 10,737.
During the process, the index again formed a strong bullish candle, indicating a strong upward move.
However, other lead indicators remained neutral during the session.
Arun Kumar, Market Strategist at Reliance Securities, said the index tested its long-term average of 10,750 with ease.
“However, the near-term indicators are yet to trigger a buy signal.
One has to tread with caution and strictly follow their trading plans.
The index could face headwinds around 10,850 and 10,950 levels, while the support is seen at 10,555 and 10,660 levels.”
Mazhar Mohammad, Chief Strategist–Technical Research Trading Advisory, Chartview India, said a strong recovery seen in last two sessions may hint at a near-term bottom around Tuesday’s low of 10,333 level, as Nifty50 registered a robust bullish candle for the second day in a row.
“However, as the index rallied almost 4 per cent in last two sessions, it can see some profit booking in next one or two sessions,” she said.
India VIX eased 10 per cent to 16.13 level.
It has seen a sharp cut of over 20 per cent in last two sessions, which suggests the bulls are now getting a grip on the market with the expectation of limited downside.
Milan Vaishnav, Technical Analyst, Gemstone Equity Research and Advisory said the market is likely to see some consolidation on Thursday.
“It would be no surprise if Nifty takes some breather and consolidates in a capped range near the current level.
The index’s behaviour against the 200-DMA level will be important to watch,” he said.
