The 50-pack index not only closed above its 5-Day EMA of 8,254, but also bridged the bearish gap in the 8,159-8,178 zone, which analysts say is a positive sign.
Nifty has surpassed the 5-Day EMA, which was not crossed during the entire correction, said Amit Shah, Technical Research Analyst at Indiabulls Securities.
“A phase of relief rally seems to be unfolding. Once the index sustains above the 8,300 level, one can expect a larger recovery towards 9,000 level,” Shah said.
For the day, the index closed at 8,297.80, up 496.75 points or 6.37 per cent. It was the biggest one-day gain for the index in nearly 11 years.
“After showing a positive divergence on the daily chart, the index managed to catch a bull stream. If the index manages to hold above 8,200, we may see some more upside towards immediate resistance in the 8,500-8,700 zone. Support is seen at 8,150-8,000,” said Rohit Singre of LKP Securities.
Mazhar Mohammad of Chartviewindia.in advised traders with high risk appetite to make use of any dip in the 8,000-7,900 range to create fresh long positions with a stop below 7,700, for a target of 8,700.