Nifty forms bullish candle after 5 sessions of sideways trading

The equity benchmark indices made a new high closing with broader market participation. The NSE Nifty closed at 16364.40 points with a gain of 82.15 points. Barring the Nifty Pharma index, all sector and thematic indices ended with positive gains. It declined by 1.11 per cent. The Media and IT indices are the top gainers with 2.28 per cent and 1.82 per cent. Realty index up by 1.21 per cent. The Smallcap-100 index is back into action with 2.12 per cent and the Midcap-100 index up by 1.01 per cent. The India VIX is down by 2.67 per cent and settled at 12.37. The overall market breadth is extremely positive as 1574 advances and only 371 declines. About 68 stocks hit a new 52 week high, and 233 stocks traded in the upper circuit.

The Nifty formed a strong bullish candle after five days of indecisive and sideways action. It gained 69.80 points in the last five trading sessions. It closed at the five days high; In fact, by closing above the 16369, it has broken out of a five-day base. During the last five days, it experienced higher volatility with negative market breadth. Today, across the broader indices, the breadth is extremely positive. Institutional participation has improved, and every low is attracted buying support. With the five-day consolidation, the support levels further moved higher. As the Nifty registered a closing high, the positive bias will continue as long as it closes above the prior day low. Wednesday's low, 15162, which is the low of the last five-day consolidation, will be a key support for now. The RSI closed above the prior swing high, and the MACD histogram improved with Thursday's move. If the Nifty sustains above 16,286 points, the immediate targets are placed at 16,485 and 16,685. Keep a trialing stop loss according to the risk level, and continue the long positions.

(The author is financial journalist,

technical analyst, family fund manager)