Charts indicate neutral to positive

The benchmark indices closed higher with negative market breadth. NSE Nifty advanced by 158.45 points or 0.89 per cent and closed at 18053.30. The Nifty FMCG, Realty, Infra, and Energy indices gained by 1.2 per cent. The IT index is up by 0.80 per cent. The PSU Bank index, down by 1.84 per cent, is the top loser. The Pharma index closed with a small decline. The market breadth is negative as 1061 advances and 847 advances. Nifty500 index breadth is also negative as 275 stocks were closed with losses. About 35 stocks hit a new 52-week low, and 73 stocks traded in the upper circuit. Adani Green, Reliance, and ICICI Bank were the top trading counters on Tuesday.

Markets are getting in the mood of Union Budget. The nervousness gripped all around. The barometer of the market, the Nifty, closed higher and above the prior day's high. For the last three days, it has been making higher lows and higher high candles. Important technical development occurred today is, The index closed above the 20DMA first time after 14th December. It formed an engulfing kind of candle, which is a positive sign. The index also closed above the 23.6 per cent retracement level of the prior downtrend.

The MACD line is about to move above the signal line. The intraday dip was bought into. The RSI is above the 48 zone, and a close above the 50 will be a big positive for the broader market. On an hourly chart, the index is above the slopping trendline resistance. Even after all these positive development, the market breadth is negative. At the same time, the banks are nervous. Today the PSU banks were negative, and many of them have formed bearish patterns. The Bank Nifty formed a Doji candle, which is indecisive. Relative Strength is improving in the IT stocks. For the short-term- as mentioned earlier, above the 20DMA and 23.6 per cent retracement level, it may test the 18191-324 zone before the Budget. It is the time to be neutral to positive, but with a controlled position size.

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