Analysts said a breakout like this should ideally push the index to 16,200-16,400 zone in the coming days, but certain technical indicators are raising questions over the strength of the breakout.
“Technical oscillators are still in favour of the bears, raising doubts over the sustainability of the breakout. This breakout is made on the back of the narrow trading range and a negative advance-decline ratio, which is a cause for concern,” said Mazhar Mohammad of Chartviewindia.in.
This analyst said a trade above the 15,855 level is a must for Nifty to retain positive bias.
For the day, the index rose 70.25 points, or 0.44 per cent, to close at a record high of 15,924.
Independent analyst Manish Shah said Nifty50 has not not seen a larger-than-normal range expansion.
“But if the index closes above the 15,930-15,950 range for the next two-three consecutive days, the breakout will be confirmed. If the index drops below 15,840, we will have to rethink if there is a failure of the breakout,” he said.
Shrikant Chouhan of Kotak Securities believes the earlier resistance in the 15,900-15,870 zone would act as a major support range and advised buying if the index drops below the range. Chouhan sees 16,000 as the immediate obstacle.
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