Positive bias for Nifty above 15,600 level

Domestic stock markets recovered massively and closed at day's high on Monday. The NSE Nifty gained by 63.15 points and closed at 15,746.50 points. The PSU Bank index up by 4.11 per cent. Realty and Metal indices by 2.33 per cent and 1.12 per cent respectively. Barring IT and Auto indices, all the indices advanced by 0.50 per cent to One per cent. The market breadth is positive as 1,223 advances and 738 declines. Today, 157 stocks hit new 52 weeks high and 171 stocks traded in the upper circuit. The India VIX index closed above the 15.

The Nifty has erased its opening losses for the second consecutive day and closed at the day's high. It crossed the previous day's high and almost closed near it. The broader market participation, Metals and BFSI sector stocks played a vital role in the market recovery. It is like a buy on the dip market, and almost every low has been bought. The Bank Nifty decisively closed above the previous day's high and formed a big bull candle. It moves 1,000 points in a day. The opening shorts were trapped as the up move was sharp. Both the indices were moved in a staircase manner during the day. As we expected, the daily ranges are increasing. Because of this, the ATR indicator showing a sharp rise.

On a daily chart, the MACD histogram increased further and showing the bearish momentum. The low VIX is showing its impact on the market. The massive short covering largely backs the index rise. As we entered into the last leg of the June derivatives series expiry, the daily ranges may increase further. To sustain the recovery, it requires follow-through days. On a 75-minutes chart, the Nifty closed above the moving average ribbon and showed the signs of reclaimed bullish strength on a shorter period. The directional indicators are at an influx point and expect a sharp move. As long as it moves above the 15,600 level, it'll be with a positive bias.

(The author is financial journalist, technical analyst, family fund manager)