Awaiting a positive trigger

The frontline index closed in a positive territory for the third straight session. The sentiment is mostly positive as the IT stocks rallied smartly. The much-hyped IPO, Zomato subscribed fully and created a buzz in the market. The Nifty closed at 15853.95 points with a 41.6 points gain. The Nifty IT index rallied by 3.16 per cent. All the other sectoral indices moved in a lacklustre manner. VIX is down by 0.26 per cent. The Midcap and Smallcap indices moved in line with the benchmark index. The market breadth is slightly positive as 1013 advances and 917 declines. About 228 stocks hit a new 52 weeks high and 164 stocks traded in the upper circuit.

The Nifty closed above the previous day's high. It faced resistance at the upward trend line, drawn from low on April 22. For the fourth day, the index is below the trendline. It is at just another 40 points distance from it is all-time high closing. Here, the need to consider the afternoon price action today. After touching the 15877 levels, it failed to move further and declined. It formed a hanging man candle on a daily chart.

On the intraday chart, it formed a lower high. This Intraday price will be significantly tomorrow. A move above today's high of 15,877 points is positive and can try to close above the 15,900 points. If it fails to do so, the consolidation continues for some more time. As the weekly expiry in place, the volatility is absolutely flat. Unless a faster move is recorded, the box range will continue. The overall market breadth is almost 1:1, and the index breadth is negative. This shows the internal weakness in the index. The market is waiting for a positive trigger to move higher with a big bang note. Let us wait for that moment. Technically, the index is neutral, and trading opportunities are more in stocks than the index. Sector rotation and the stock-specific action will continue.

(The author is financial journalist, technical analyst, family fund manager)