Benchmark Nifty Trading In A Tight Range

The equity indices traded sideways, but many stocks have given strong comeback, especially Adani group. The Nifty gained by 80.40 points or 0.33 per cent and closed at 24,274.90. The Microcap and Energy indices are the top gainers at 1.68 per cent and 1.45. per cent respectively. The commodity, CPSE, PSE, Smallcap, and Media indices gained over one per cent. The Pharma is the top loser with 0.61 per cent. The India VIX is down by 4.44 per cent to 14.62. The market breadth is positive as 1902 advanced and 874 declined. About 71 stocks hit a new 52-week high, and 144 stocks traded in the upper circuit. Adani Enterprises, NTPC Green, Adani Ports, Adani Power, and HDFC Bank were the top trading counters in terms of value.

After opening with a huge gap-up of 346 points, the Nifty has been trading in a 229-point range for the last three days. The index closed above the open in the last three days. A multi-year breakout in index heavyweight HDFC Bank and the rebound in Adani group stocks resulted in a positive close. As stated earlier, the index has not given the weaker signal, but trading in the tight range will again result in an impulse move. This tight range has not given any clue about the future trend. An either-side breakout will give a fresh entry. The monthly expiry will be interesting, as the rollovers were still on the lower side at just 42 per cent. For the bullishness to continue, the index must close above the 24,355 and 24,414 zone of resistance. A weekly close above 24,538 is a sign of a trend reversal. The immediate target is the 50DMA of 24721. But if the index fills Monday’s gap, it will be negative for the near term. The index must protect the recent low. Now, the 200DMA is at 23563, which is a crucial support. Stay positive above the gap area.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)