Mkt course hinges on State elections outcome

Soaring high

• 219 stocks hit a new lifetime high
• RSI (74.36) is in the overbought zone
• MACD is also showing overboughtness
• 219 stocks hit a new lifetime high

The equity market closed at a new all-time high with all-around buying. Nifty was up by 134.75 points or 0.67 per cent and closed at 20267.90. Only Nifty Auto index declined by 0.36 per cent. The Media index is the top gainer with 2.57 per cent, followed by FMCG index with 1.58 per cent. All other indices up by 0.5 per cent to one per cent. The India VIX declined by 2.43 per cent to 12.38. The market breadth is positive as 1437 advances and 1061 declines. About 219 stocks hit a new lifetime high, and 93 stocks traded in the upper circuit. Tata Technologies, PFC, and HDFC Bank were the top trading counters on Friday in value terms.

The benchmark index, Nifty, closed at a new all-time high, with higher volume in the last 11 weeks. It has formed a strong bullish bar on a weekly chart. In the last four days, the index is up by 450 points, with two huge positive gaps. The current rally is five weeks old and up by 7.7 per cent from the recent low. As it closed above the previous all-time high, there is no resistance visible now. As long as it trades above Friday’s gap area, there will be a positive bias.

The five State election results are scheduled for this weekend and may impact the market. The exit polls fuelled the sentiments in the market. To continue this momentum, the index needs a follow-through day. The volumes were half of the previous day. The RSI (74.36) is in the overbought zone. The MACD is also showing overboughtness in the market. It is time to be cautiously optimistic. If the index extends the rally, we may see near the 20500 zone. On the downside, a close below 20183 is negative, and it can test 19980. Be vigilant, stay with strict stop loss.

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