Nifty review: 17429 will be a key resistance for near term

The massive rally in global markets fuelled the positive closing in domestic markets. The Nifty closed with 171.35 points or 1.01 per cent gains and settled at 17185.70. The Banknifty and FinNifty gained by 1.76 per cent and 1.82 per cent, respectively. The Nifty IT is also up by 1.63 per cent. The Nifty Energy index is a top loser with one per cent. The Realty, Media, Auto, and Metal indices closed with more than half a per cent gain. The market breadth is negative as 970 declines and 898 advances. About 45 stocks hit a new 52-week high, and 72 stocks traded in the upper circuit. Infosys, Reliance and HDFC Bank were the top traded counters today in terms of value.

The Nifty opened with a 308 points positive gap and sustained most of the gains. It also opened above the 20 and 50DMAs, but at the end of the day, it closed below these crucial moving averages. The weekly price action is limited to the previous week's range and forms an inside bar. As the Nifty once again back into the range, consolidation will continue further. The previous week's range and the 50 and 200DMA levels are crucial for now. In the post-lunch session, the index declined sharply and closed near the day's low. The sharp decline in the afternoon session has raised doubts about the positive strength. Though it has not filled the gap, after a one per cent gain, the MACD has not given any bullish signals.

The Relative Strength Index is still below the 50 zone. Importantly, all the sectoral indices also closed below the opening levels. The negative market breadth is also supporting the doubts on the positive gap. There are no divergences developed yet. Currently, the price structure is a bearish flag pattern. But in any case, if it closes above 17429, it will be a double bottom breakout. For now, 17429 will be a key resistance for the near term. A move below 17000 will increase the momentum on the downside. Watch the global markets at the weekend.