MACD About To Give Bullish Signal

The equity benchmark indices rallied over two per cent and marched above the 23,800 level. The Nifty gained by 557.35 points or 2.39 per cent and settled at 23,907.25. Barring the Nifty Media index, which declined by 0.32 per cent, all the sectoral indices closed with decent gains. The Realty is the top gainer with 3.17 per cent, followed by the PSU Bank index with 2.99 per cent. The Infra and PSE indices gained over 2.79 per cent and 2.42 per cent. The CPSE, FMCG, Oil and Gas, Energy, and Consumption indices are up by over two per cent. All other indices gained over one per cent. The broader market indices, Midcap and Smallcap indices, were up by 1.16 per cent and 0.90 per cent, respectively. The market breadth is positive as 1,917 advances and 877 declines. About 92 stocks hit a new 52-week high, and 92 stocks traded in the upper circuit. Adani Enterprises, Adani Ports, Reliance, and Adani Green are the top trading counters in terms of value.

With the broader market participation, the Nifty rallied by over 500 points and registered one of the most bullish days in recent times. All the Nifty stocks were in the green. The Nifty bounced back to above 200DMA and 200EMA. After taking support at a 50-week average, the index has closed above the last four days or week’s highest level. The Weekly volumes were higher than the previous week, but the daily volumes were lower than the previous day. It also erased the last four days of losses and closed above the 8EMA. On an hourly chart, it broke above the prior high and closed above the moving average ribbon. As mentioned on Thursday, the positive divergence in hourly RSI has shown its impact, and the bullish reversal confirmation was obtained. It also tested the prior breakdown point. Importantly, the Reliance alone contributed over 65 points in this rally. The daily RSI is back in the neutral zone. The Nifty has formed a hammer candle on a weekly chart, indicating the probable reversal. The MACD is about to give a bullish signal. The 20 DMA is just 0.52 per cent away from the current price. If the index closes above this level of 24,031, will continue the rally further. The two-state election outcomes, geo-political tensions, and the rise in the Dollar index are the risk factors for next week.

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