No weak signals from key index Nifty as of now

Before the monthly expiry, it may try to trade in a tight range. The MACD is flattened, and the RSI is below the 75 zone

The equities continued to move higher after a long weekend. The Nifty gained by 91.95 points or 0.43 per cent. Only Nifty IT, Media, and PSU Bank indices closed lower. The Nifty Energy, Metal, and Pharma indices gained over one per cent. All other sectoral indices advanced by less than a percentage point. The market breadth is positive with 1512 advances and 1011 declines. About 166 stocks hit a new 52-week high, and 151 stocks traded in the upper circuit. The Mazdok, HDFC Bank, and the ICICI Bank were the top trading counters in the market on Tuesday.

The Nifty opened the week positively and closed higher by 0.43 per cent. It closed above the previous day’s high. It faced resistance at the 78.6 per cent retracement level of last week’s range. The volumes were much lower. The FII participation was very limited as they went on holiday. The index was unsuccessful in moving above 21465 after two hours of trading.

After three bearish candles, the index has formed three bull candles. It is in the last Wednesday’s range. As the index is in consolidation mode, it does not provide any weaker signals. There are only three trading sessions in this calendar year. Before the monthly expiry, it may try to trade in a tight range. The MACD is flattened, and the RSI is below the 75 zone. The Bollinger bands are showing the contraction signs. For the next three trading sessions, the index will trade in a tight zone. Apply neutral bullish strategies for the next three sessions, as the index is in the zone. Still, it is not a time to take positions.

(The author is Chief Mentor, Indus School of Technical Analysis, financial journalist, technical analyst, trainer, family fund manager)