Nifty gains 128 points

The Indian stock markets rallied further to new lifetime highs. The Nifty opened above 13000 levels and closed strongly at 13055.15. It gained 128.70 points or one per cent. After one day subduedness, the BFSI sector led the market from the forefront. The Banknifty advanced by 2.46 per cent and erased yesterday's loss. The Pharma and Auto, Metal and IT sectors participated in the rally. The Broader indices, Nifty 500, Midcap and Small-cap indices moved in line with benchmark indices.

The market breadth is positive as 1111 stocks closed higher, and 756 stocks declined. 88 shares made a new 52 week high, and only five stocks closed their 52 week low. The Nifty closed above the 13000 levels for the first time. It has broken out of a five-day flat base and formed a strong bullish candle. It also closed above the critical resistance line on the weekly chart. On a lower time frame chart, the RSI has broken out of a downward channel and indicating that the prior trend has resumed.

With today's strong close, the last five-day consolidation with bearish bars has no relevance now. This upward breakout rally continues for some more days as the sector participation, and the breadth has improved. Interestingly, the India VIX gained by 1.25 per cent closed at 21.05. This is an indication the volatility may increase further as the Nifty moves higher. One more interesting observation is that the momentum still not picked up as the MACD histogram declined further.

The RSI has above 75 zone again. All the moving averages are trending up. The Nifty opened with gap and gap continued till the end. This formation categorised as an Evening star. Only in case it opens gap down and closes in negative territory, then the reversal on cards. Otherwise, the current uptrend will continue till 13265. As long as Nifty, making higher closes be with positive bias.

The author is a Financial Journalist, Technical Analyst, Trainer, Family Fund Manager