MACD Shows Strong Bullish Momentum

Now, the index came closer to the key resistance area of 24480-538. The 50DMA is just 0.82% away at 24624. It closed above the 10-wk average. If the index is above to clear this resistance zone, we will get the confirmation for reversal

The equities rallied for the third successive day, with a broader market participation. NSE Nifty is up by 181.10 points or 0.75 per cent and closed at 24,457.15 points. The Microcap index outperformed the broader market indices and was higher by 1.23 per cent. The FMCG and Pharma indices declined by 0.39 per cent and 0.02 per cent, respectively. The PSU Bank and Media indices, up by 2.60 per cent and 2.53 per cent, respectively, are the top gainers. The CPSE, PSE, Metal, Commodities, Oil and Gas, Infra, and Bank Nifty were advanced by over one per cent. The India VIX is down by 2.23 per cent to 14.37. The market breadth is extremely positive as 2,047 advances and 772 declines. About 108 stocks hit a new 52-week high and 174 stocks traded in the upper circuit. HDFC Bank, Ola Electric, Reliance, Adani Ports and Mazdock were the top trading counters on Tuesday in terms of value.

Finally, the Nifty has broken out of a seven-day base. The index opened above the resistance area and sustained till the end. The volumes were higher than in previous days. The index moved above the previous week’s high. It also closed above the 38.2 per cent retracement level of the prior fall. Now, the index came closer to the key resistance area of 24480-538. The 50DMA is just 0.82 per cent away at 24624. It closed above the 10-week average. If the index is above to clear this resistance zone, we will get the confirmation for reversal. The RSI is above 55, which is a positive sign. The MACD line is near the zero line, and the histogram shows a strong bullish momentum. The hourly RSI (76.17) is near the extreme zone, indicating the probable small retracement. The HDFC Bank hit a new high, and the Reliance continued its upward momentum, contributing above 45 points to the Nifty today. Several Mid, Small, and Microcap stocks are in good technical set up to scale high. The broader market picture has changed to positive. Now, focus on high relative strength stocks with a solid bullish breakout. Stay positive as long as the benchmark protects the prior day’s low.

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