Nifty has potential to move further up
It’s better to protect the profit with a strict risk management
image for illustrative purpose
The equities rallied with a renewed buying interest. The Nifty was up by 213.40 points or one per cent and closed at 21654.75. The PSU Bank index is the top gainer with 2.06 per cent. The Nifty Auto, Metal, Banknifty gained by 1-1.51 per cent. The Energy, PSE and CPSE indices were down by less than half per cent. All other sector indices gained by less than a percentage point. The India VIX is up by six per cent. The market breadth is positive as 1343 stocks advanced and 1164 declined. About 187 stocks hit a new 52-week high, and 138 stocks traded in the upper circuit. HDFC Bank, Happy Forge and ICICI Bank were the top trading counters on Wednesday in terms of value.
The Nifty hit another lifetime high and closed at the highest level. It formed the strongest possible candle as the open was low and closed at the day’s high. The Nifty also registered the highest close after a six-day gap. The volumes are better than the previous day. With today’s move, the index has extended more than double or 200 per cent of the prior downswing of September-October. As the index closed above the prior high, it has broken out of brief consolidation. As the Nifty closed above the prior pivot, it registered a breakout with better volume. The last four days of price action suggest bulls are back with renewed strength. The RSI is in a strong bullish zone and below the extreme levels. It shows that the index has the potential to move further high. An increased MACD histogram is also an indication of momentum gain. The Elder’s impulse system has formed a bullish bar after six days. Now, the support rose to 21456, which is the previous closing high. If the Nifty sustains above this level till this weekend, there is a higher probability of testing the 22,000 level, which is a pattern target. As stated earlier, there are no bearish signals available now, and don’t be in short. At the same time, protect the profit with a strict risk management.
(The author is Chief Mentor, Indus School of Technical Analysis, financial journalist, technical analyst, trainer, family fund manager)
