Benchmark Still Hovering In Bearish Grip

The Banks and Financials led the rally. NSE Nifty gained by 141.55 points or 0.61 per cent and closed at 23,344.75 points. The Private Bank and PSU Bank indices gained by 2.38 per cent and 1.99 per cent. The Bank Nifty is up by 1.67 per cent, and FinNifty advanced by 1.41 per cent. The CPSE, PSE, Smallcap, Metal, and Media indices are up by over a per cent. The Nifty Auto and Consumer Durables declined by 0.52 per cent and 0.29 per cent. The FMCG is down by 0.11 per cent. The India VIX is up by 4.24 per cent. The market breadth is positive as 1,809 advances and 1,053 declines. About 53 stocks hit a new 52-week low, and 163 stocks traded in the upper circuit. Axis Bank, Kotak Bank, Zomato, Kalyani Jewellers, and Reliance were the top trading counters in terms of value.

The Nifty has formed a higher high and higher low candle and closed above the previous day’s high. Kotak Bank, HDFC Bank, SBI, and ICICI Bank have contributed 110 points to this rally. Even though the index tested Thursday’s high, it failed to close above it. The 8EMA acted as resistance, and the index just closed on it. The RSI moved into the neutral zone. On a lower time frame, the current price pattern looks like an ascending triangle base. If the index closes above 23,392, the breakout will be a reality. The volumes were higher than the previous day. This rally is mainly due to the short-covering. The derivative data shows not much increase in the open interest. The Nifty and Bank Nifty lost momentum in the last hour. The fresh shorts were built up in the last hour. Overall, the index is still not out of the bearish grip. It needs a strong bullish bar with the highest volume and a close above 23,392 points. The market participants are keenly waiting for Trump’s comments after taking charge as US president. This event risk is the key factor for a market for a directional move.

(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)