Charts indicate possible uptrend

The current swing is 10 days old. Normally, a minor swing rarely extends more than 10 days. So, the Monday’s close is crucial for the market. If the Nifty continues to close positively, it can test the 24,600 level. Beyond this level, it will be a difficult task to move on

The benchmark indices were volatile as they reversed the opening losses. NSE Nifty closed at 24,323.85 with a 21.70 points or 0.09 per cent gain. FinNifty and Bank Nifty were the losers with 1 per cent and 0.83 per cent. The IT and Realty closed with a small loss. The Oil and Gas and CPSE were the top gainers with 1.89 per cent and 1.78 per cent. PSE, Pharma, PSU Bank, Infra, and FMCG indices gain over one per cent. All other indices ended with decent gains. The India VIX is down by 1.24 per cent to 12.69. The market breadth is positive as 1,609 advances and 1,083 declines. About 245 stocks hit a new 52-week high and 148 stocks traded in the upper circuit. RVNL, HDFC Bank, Mazdock, and IRFC are the top trading counters in terms of value.

Even after HDFC Bank dragged the index by 131.36 points with a decline of 4.58 per cent, the Nifty could finally close in positive territory with the help of Reliance and SBI. The Nifty closed above the Wednesday’s Doji candle. It closed above last week’s high. Friday’s volumes indicate that there is no weakness in the broader market. As the breadth is also positive, it is another good sign. Importantly, the index holds only one distribution day, which means the index is in a confirmed strong uptrend. Stock-specific activity will continue, and sector rotation will go on. The index closed flat to positive manner, with a volatile move.

The opening gap was also filled by the end of the day. The index did not close below the prior day’s low after June 21. The current swing is 10 days old. Normally, a minor swing rarely extends more than ten days. So, the Monday’s close is crucial for the market. If the Nifty continues to close positively, it can test the 24,600 level. Beyond this level, it will be a difficult task to move on. However, a close below 24,168 will be a weaker sign. The immediate support is at 8EMA of 24,118 points. Only below the short positions will open. Otherwise, it will be wise to be with the trend.

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