MACD indicates fresh bullish signal

Positive Market Breadth

• India VIX up by 7.46% to 12.17
• 1,317 advances and 1,195 declines
• 165 stocks hit a new 52-week high
• 132 stocks traded in the upper circuit

The equity benchmark indices broke out of a range and formed a new swing high. Supreme Court’s comments on Hindenberg’s report on the Adani group as not Credible, the market reacted exuberantly. NSE Nifty rallied by 95 points or 0.48 points and closed at 19,889.70 points. The Nifty Energy and Oil and Gas indices were the top gainers with 2.43 per cent and 2.28 per cent, respectively. The Metal, PSU Bank, and Infra indices were up by over a percentage point. The FMCG and Pharma indices were the losers, with 0.17 per cent and 0.34 per cent.

All other sector indices closed with decent gains. The India VIX is up by 7.46 per cent and closed at 12.17. The market breadth is positive as 1317 advances and 1195 declines. About 165 stocks hit a new 52-week high, and 132 stocks traded in the upper circuit. Adani Power, Adani Enterprises, and HDFC Bank were the top trading counters in terms of value.

The Nifty has broken out of a six-day ascending base with an increased volume. This breakout negated the previous lower high and formed a new higher high. Now, the market has changed to a confirmed uptrend. The Adani group stocks and Oil and Gas stocks were behind the rally. The breakout with above-average volume erases the indecisiveness in the market. The Nifty also broke out inside actions of the 16th November range. There is a clear momentum built up that is visible. The RSI is strong above the 65 zone. The MACD histogram shows an increased bullish momentum.

As the Nifty closed at the day’s high, all the other indicators are also in the bullish structure. On the hourly, the RSI closed above the prior swing highs, negating the bearish divergence implications. The hourly moving average ribbon acted as support in the recent base, and the MACD has given a fresh bullish signal. The underperforming Bank Nifty also closed above the prior high.

Several stocks are breaking out of the bases. The Nifty is now in the leading quadrant with better relative strength and momentum, shifting from neutral to bullish bias. Now, the support has been raised to the 19,762-800 zone. We will get the weaker signals only below this support zone. On the upside, the immediate target and resistance is at 19926. Be positive and continue the long position with trailling stop loss.

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