Consolidation for 1 more session likely

NSE Nifty reclaimed above the 17,650 zone with an all-around buying interest. The benchmark index went up by 126.35 points or 0.72 per cent and settled at 17665.80 points. The Metal index led the rally with 1.67 per cent. The Bank Nifty and FinNifty are up by 0.98 per cent and 0.65 per cent respectively. Smallcap-100 index outperformed by gaining 1.19 per cent.

Overall, the other sectoral indices are up by less than a percentage point. The market breadth is positive as 1,224 advances and 689 advances. About 94 stocks hit a new 52- weekly high, and 153 stocks traded in the upper circuit. Reliance, Adnani Enterprises, and RIIL were the top counters on Monday.

For the third consecutive day, the Nifty traded within the last Wednesday's range.

At the same time, the last three hours of price action have formed indecisive and bearish bars, which is a caution for now. The trading range is limited to Thursday's action.

These series of inside bars are not giving any decisive direction. Only in case of a break above 17777 or below the 17400 level give a directional trade. Out of seven hourly bars today, five are bearish in nature. The volume was the lowest since 17th August.

First and last 30 minutes, the volume was recorded higher, but the whole day it has not given any clue on future direction. The Nifty formed a bull candle within the range and closed at the sloping trend line. As mentioned in earlier columns, the 17800-18115 zone will be crucial for an uptrend to continue.

It has to close below 17400-329 for a bearish reversal. As we expected, the consolidation might continue for another day. Either side breakout will lead to an impulsive on either side. For now, be stock specific, which has stronger Relative Strength and outperforms stocks. Index may give a decisive directional trade.

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