Charts indicating possible consolidation

Nifty recovered and closed above the previous gap. On derivatives expiry, the recovery was expected due to the short unwinding. The volumes were lower than Wednesday

Mkt Breadth Turns Positive

• 1,928 advances
• 588 declines
• 52 stocks hit a new 52-wk high
• 98 stocks traded in the lower circuit

The equities recovered from the previous day’s sharp fall. NSE Nifty gained by 104.90 points or 0.50 per cent and closed at 21,255.05 points. The recovery in PSU Banks, Infra, Energy and Metal sectors rose by 1.18 per cent to 2.49 per cent. Bank Nifty and FinNifty are also up by 0.83 per cent and 0.59 per cent. All other sectoral indices also registered decent gains.

The India VIX is down by 4.79 and closed at 13.75. The market breadth is positive as 1,928 advances and 588 declines. About 52 stocks hit a new 52-week high, and 98 stocks traded in the lower circuit. HDFC Bank, IRFC, IRCTC, and the newly listed Inox India were the top trading counters yesterday in terms of value.

The Nifty recovered and closed above the previous gap. On derivatives expiry, the recovery was expected due to the short unwinding. The volumes were lower than Wednesday. Soon after the big gap-down opening, the index smartly recovered by 1.5 per cent from the day’s low. After the big fall, Wednesday’s retracement is normal. To sustain yesterday’s upside move, follow-through is required. A positive close with a higher volume will be positive. With the last two days’ move, the indicators came down from extreme overbought conditions.

The index closed above the 8 EMA. Yesterday’s low of 20,976 is crucial for the near term. Yesterday, the index almost filled the 14th December gap. For now, 20950-976 zone support will play a major role on the upside. Resistances are at 21,357 and 21,461 points. Above these levels, the index will make a new lifetime high. Expect the next 2-3 days of consolidation before it gives a decisive directional view. If the Nifty forms an indecisive candle on a weekly chart, expect more consolidation. For now stay with a neutral bias.

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