Charts indicate waning strength
Nifty closed above the 20DMA and 50 per cent retracement level of the prior downswing
image for illustrative purpose
There are 3 gap-up and gap-down openings. The positive gaps show bullish strength. But the question is, will it cross the 19,900 level?
Whats Up
♦ 137 stocks registered 52-wk highs
♦ 136 stocks traded in the upper circuit
♦ MACD line is almost at zero line
♦ India VIX declined 2.53% to 10.98
♦ Volatility index showing a caution for ongoing upswing
The equity benchmark indices registered another positive closing with broader market participation. NSE Nifty gained by 121.50 points or 0.62 per cent and closed at 19,811.35 points. The PSU Bank, IT, and CPSE closed with minor losses. Nifty Auto and Infra indices were the top gainers with 0.92 per cent. All the other indices advanced with modest gains. The market breadth is positive. About 137 stocks registered 52-week highs, and 136 stocks traded in the upper circuit. HDFC Bank, ICICI Bank, and Reliance were the top trading counters today in terms of value.
The Nifty closed above the 20DMA and 50 per cent retracement level of the prior downswing. It recorded another gap opening and sustained. The index has registered a close above the two-week high. The volumes were lower than the previous day. The MACD line is almost at the zero line. If the index registers another positive closing, the MACD will give a bullish signal.
The RSI is at 55, and a move above 60 will confirm a further bullish move. The Nifty gained 505.60 points from the 4th October low. There are three gap-up and gap-down openings. The positive gaps show bullish strength. But the question is, will it cross the 19,900 level? Today’s strong move is limited to the first hour only. It traded mostly range-bound with high volatility.
The momentum looks waning on a lower timeframe. Now, the 19,770 holds as a key support. In any case, the index closes below 19,770 points, which means the five-day pullback has ended. On the upside, the 19,883 level will act as a strong resistance. The India VIX declined another 2.53 per cent to 10.98, which is a caution for the ongoing upswing. Till then, it is better to be with a neutral bias.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
