Nifty forms a strong bullish candle
Nifty broke out of a tight range with higher volumes than previous day; It formed another strong bull candle and closed at a new lifetime high; Avoid short positions for now
image for illustrative purpose
Only a close below the prior day’s low will give a weaker signal. HDFC, ICICI, and Axis Banks were on fire, together contributed 148.75 points to Nifty. On Tuesday’s big positive day, the Nifty breadth is 1:1, and the broader market’ advance-decline ratio is negative
Negative Market Breadth :
- 1,457 declines
- 1,209 advances
- India VIX up by 1.81%
- 143 stocks in upper circuit
- 181 stocks hit a new 52-wk high
The rally in the banks and financials pushed the markets to a new high. NSE Nifty gained by 183.45 points or 0.78 per cent. FinNifty was the top gainer by 1.95 per cent, followed by Bank Nifty with 1.74 per cent. Nifty IT is up by 0.81 per cent. Nifty Realty index is down by 1.75 per cent. CPSE, PSE, Commodities, and Energy indices are down by over half a per cent. All other sector indices closed with less than half per cent gains or losses. The India VIX is up by 1.81 per cent. The market breadth is negative as 1,457 declines and 1,209 advances. About 181 stocks hit a new 52-week high, and 143 stocks traded in the upper circuit. HDFC Bank, GRSE, ARE&M, and ICICI Bank were the top trading counters in terms of value.
Nifty has broken out of a tight range with a strong bull candle and higher volume than the previous day. As suspected on Monday, the index came out of indecisiveness after a white candle. It formed another strong bull candle and closed at a new lifetime high. The Nifty almost tested our target of 23,770 on Tuesday. The index also broke out of a rising channel. Now, the index is in uncharted territory and has cleared all resistance. The last two weeks of indecisiveness were erased with Tuesday’s move. Now, as long as the previous day’s low is protected,be with a positive bias.
Only a close below the prior day’s low will give a weaker signal. HDFC, ICICI, and Axis Banks were on fire, together contributed 148.75 points to Nifty. Interesting fact: On Tuesday’s big positive day, the Nifty breadth is 1:1, and the broader market’ advance-decline ratio is negative. For the last few weeks, the index has been showing some kind of weaker signals, but the bears are failing to get a grip on the market. The RSI has finally broken the two weeks of sideways. On a weekly chart, the index has formed a bullish engulfing candle. Now, the support zone has risen to 23,562-500. Unless this support is violated, better not to venture to take short positions. Now, the next target is 23900 if the rally continues.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
