NEW DELHI: The Nifty50 hit a record high on Thursday and signed off the session above the 10,650 level for the first time ever. In the process, the index made a small bullish candle on the daily chart.
The index is likely to consolidate further unless it decisively breaks above the 10,660 level.
"Any sustainable move above the 10,660 level can make the Nifty50 rally towards 10,690, 10,720 levels. On the downside, an immediate intraday support stands at around 10,630 level," said Rajesh Palviya, Head Technical & Derivatives Analyst at Axis Securities.
At close, the Nifty50 rose 19 points, or 0.18 per cent, to 10,651. The 14-day RSI stood at the 68 level. A level above 70 signals overbought condition.
This was the third day when the index traded in a 50-point range between 10,620 and 10,670 levels.
"The rangebound moves clearly suggest that the market is in need of a trigger for further upside. Unless it sees a strong intraday move beyond the 10,660 level, it is bound to remain sideways, with the risk of a sudden fall on the downside," said Mazhar Mohammad of Chartviewindia.in.
Mohammad said momentum oscillators on the lower time frame charts are sending out a sell signal, whereas oscillators on the medium-term time frame are in the extremely overbought zone.
Mustafa Nadeem, CEO at Epic Research, said the ongoing consolidation is healthy in nature, as it is bringing in smart money which makes the market move.
A range break with enough push will create momentum in the short term, said Nadeem.