Charts indicate neutral to positive bias
For the last 3 sessions, volumes declining
image for illustrative purpose
Positive Market Breadth
- It’s gap-up opening
- Nifty closed at the day’s high
- 129 stocks hit a new 52-week high
- 161 stocks traded in the upper circuit
The benchmark indices rallied on Monday and closed above the prior session’s high. NSE Nifty is up by 181.15 points or 0.97 per cent and closed at 19,4111.85 points. Only PSU Bank Nifty closed with a 1.09 per cent gain. All the indices closed 0.5 per cent to two per cent. The India VIX is also up by 2.04. The Energy index is the top gainer with 1.34. The India VIX is up by 2.04 per cent to 11.10. The market breadth is positive. About 129 stocks hit a new 52-week high, and 161 stocks traded in the upper circuit. Zomato, HDFC Bank, CELLO, and Reliance were the top gainers in terms of value.
The equities continued to rally for the third successive day. The benchmark index Nifty registered another gap-up opening and closed at the day’s high. It formed a strong, bullish candle. A sharp rise after a sharp decline is an indication of an unhealthy trend. Even though the index was up by a percentage point, the volumes were lower than the previous day. For the last three days, volumes have been declining. The rally with a declining volume is not trustworthy.
The Bank Nifty has formed a fourth consecutive Doji candle, which indicates indecisively positive. The index tested the 20DMA today, which is at 19,423 points. The 61.8 per cent retracement level is at 19,463 points, which is an immediate resistance. The Nifty is up by 585 points or 3.11 per cent from the 26th October low. The RSI closed above the 50 zone. The MACD is about to give a bullish signal. On the hourly chart, it formed higher low candles showing bullish bias. For now, be with a neutral to positive bias. For a downswing, the index must close below the prior day’s low. Otherwise, stay on the sidelines. Staying with cash is also a strategy.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
