NEW DELHI: Nifty50 on Tuesday topped the 11,300 level and formed a bullish candle on the daily chart.
This was the second straight session when the index had a gap-up start.
The NSE barometer made the most of it, as it has now rallied almost 300 points from the Fridays low of 11,008.95.The 14-day relative strength index has moved above the 70 level, suggesting the index is in overbought territory.
It is also moving above all of its key moving averages.
Analysts see positive momentum to sustain for now.Supports are gradually shifting higher.
The index surpassed its resistance trend line of the sideways channel and formed a bullish candle.
A follow-up rally could continue its extended momentum.
Immediate supports exist at 11,200 and 11,118 levels, said Chandan Taparia of Motilal Oswal Securities.For the day, Nifty settled at 11,301.20, up 133.15 points, or 1.19 per cent.The sharp upmove appears to have brought the index into overbought zone on the lower time frame, charts are making a case for some cooling off in the near term, said Mazhar Mohammad of Chartviewindia.in.On the down side, Tuesdays gap zone of 11,227-11,180 can be considered as critical support going forward below which short-term trend shall come under pressure.
For time being, traders are advised to consider booking profits as Nifty heads towards 11400 levels, Mohammad said.Since most near-term oscillators are in overbought zone, one can keep a running stop loss below 11,150 levels and ride the ongoing rally till a reversal signal is in place, said Arun Kumar, Market Strategist at Reliance Securities.