The S&P BSE Sensex and NSE Nifty 50 indexes bounced back sharply in trade on Thursday despite volatility due to expiry of November futures and options contracts. The Sensex rallied 432 points to close at 44,260 and Nifty 50 index climbed 129 points to end at 12,987, 13 points shy of its important psychological level of 13,000. The rally in Thursday's session was supported by late buying in banking stocks wherein the Nifty Bank index advanced 1.2 per cent to close above 29,500. While metal stocks outperformed in the overall session with the Nifty Metal index closing over 3 per cent higher.
Nifty trading strategies for Friday: Support for Nifty at 12,800:
"A reasonable positive candle was formed with minor lower shadow. Technically, this pattern indicates comeback of bulls from the lows, after one session of weakness. The formation of bearish engulfing pattern of Wednesday has placed again at the verge of negation," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said in a research note.
"A sustainable move above 13,150 levels could negate this bearish pattern completely. Previously, for the few occasions the market has failed to show any follow-through weakness post such bearish engulfing pattern. This is positive indication and signals a strength of upside momentum in the market," he added.
Mr Shetti said that the bearish pattern was not confirmed on the charts as Nifty bounced back sharply and now it could move towards an all-time high of 13,145 levels in the near term while important support is placed at 12,800 on the downside.
"Nifty once again recovered after falling for a day. This helps traders' sentiments. 12,833-13,079 could be the band for the coming session. Markets are in no mood to correct significantly unless there is a negative trigger causing global meltdown," added Deepak Jasani, Head of Retail Research at HDFC Securities.