Markets gaining steam

The equity market rallied above the previous day's high. NSE Nifty gained by 241.75 points or 1.35 per cent. After three days of sharp decline, this rally is expected earlier. The Nifty IT index is the top gainer with 2.83 per cent. The Energy, Infra, Metal, and Auto indices are up by over a percentage point. The remaining sectoral indices are also closed with decent gains with less than percentage points. The market breadth is positive as 1187 advances and 758 declines. About 48 stocks hit a new 52-week high, and 78 stocks traded in the upper circuit. Infosys, ICICI Bank, and Reliance are the top gainers today in terms of value.

The Nifty has bounced by 241 points and closed above the prior day's high. This bounce was in the expected lines. The bounce is above the 61.8 retracement level of the previous six days' decline. A strong global markets rally on Friday influenced our markets today. The Nifty is still below the 20DMA (18309). As mentioned earlier, this will be the immediate resistance. Above this, the prior high of 18265 and the 50DMA (18309) will be crucial for directional bias. At the same time, it did not test the previous day's low, and the market condition is still as Rally Attempt. We can change the market status to Uptrend when only a close above 18309. The RSI is still in the neutral zone. And the MACD line is below the signal line and zero line. Even the Elder impulse system also formed a neutral bar. The volume improved and was better than previously indicated, and the bounce has the buying interest.

The broader market participation and good advance-decline ratio are also positives of today's market. The beaten-down IT index rallied before the earnings. Technically, some more strength is needed to change the market status.

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