Nifty forms a strong bullish bar
All the indices made gains ranging from 2.3% to 4.56%, except the Realty, Media, FMCG, and Auto indices were down by 0.04% to 0.71%
image for illustrative purpose
Charging Bulls Raise The Bar
- 1,346 advances
- 265 stocks hit a new 52-wk high
- 81 stocks traded in the upper circuit
- Equities rallied strongly
- The RSI at the highest level of 86.68
- The weekly RSI at 76.46 is above prior highs
The Nifty registered another massive gain led by the IT stocks. NSE Nifty is up by 273.95 points or 1.29 per cent and closed at 21,456.65 points. The Nifty IT index, which gained 4.56 per cent, is top gainer. The PSU Bank Index and Metal indices are up by 2.39 per cent and 2.13 per cent, respectively. On the flip side, the Realty, Media, FMCG, and Auto indices were down by 0.04 per cent to 0.71 per cent. All other sector indices were gained by less than a per cent. The India VIX is up by 6.55 per cent to 13.13. The market breadth is positive as 1346 advances and 1154 declines. About 265 stocks hit a new 52-week high, and 81 stocks traded in the upper circuit. HDFC Bank, TCS, IRFC, and Infosys were the top trading counters today in terms of value.
The equities rallied strongly to the new highs without any wavering moves. The Nifty gapped up and closed near the day’s high. The Nifty registered another massive rally with a strong bullish bar. The volumes were highest in the last eight days, showing no weakness in the market. Every small dip is used to accumulate the equities. After consolidating for the first three days, they moved massively by 530.30 points in the last two days. The RSI has been in the extreme zone for the last ten days. It is at the highest level of 86.68. Earlier on 16 September 2021, the RSI was at 86.24. Any indicator can be in the over-bought condition for a period. For a reversal, wait for the divergences to be formed at the extreme levels.
The weekly RSI (76.46) is above the prior highs. It reacted from the 80.79 level in September 2021. The last three weeks of the rally were above average, and increasing volume shows the buying interest. There is no weakness in any time frame. The last three weeks of the move are extremely impulsive, led by the large-cap stocks. As stated earlier, stay with positive bias. Only a close below the previous day’s low will provide the initial weak signals, and a close below the previous week’s low will be short-term negative. Otherwise, stay follow the trend.
[The author is Chief Mentor, Indus School of Technical Analysis Financial Journalist, Technical Analyst, Trainer, Family Fund Manager]
