Positive momentum likely till Budget
Stay vigilant on both sides as any negative surprises will hurt the sentiments and expect volatile moves
image for illustrative purpose
Positive market breadth
- 1,545 advances
- 1,042 declines
- 259 stocks hit a new 52-wk high
- 199 stocks in upper circuit
- Flattened Bollinger bands
- RSI back to near bullish zone
- MACD shows decline in bearish momentum
- Elder’s impulse system formed a strong bullish bar
The pre-budget rally began in a big way. The broader market and benchmark indices rallied above the immediate resistance. NSE Nifty gained by 385 points or 1.80 per cent and closed at 21,737.60 points. The FMCG index is the only loser with 0.14 per cent. The Energy index, up by 5.17 per cent, is the top gainer. The Infra, PSU Bank gained by 3.67 per cent, and 2.43 per cent. All other sectoral indices were up by over one per cent. The CPSE and PSE indices were advanced by 3.88 per cent and 4.46 per cent, respectively. The market breadth is positive as 1,545 advances and 1,042 declines. About 259 stocks hit a new 52-week high, and 199 stocks traded in the upper circuit. HDFC Bank, Reliance, NHPC, SJVN, and RITES were the top trading counters on Monday, in terms of value.
Spearheaded by Reliance Industries, the equities bounced sharply to last week’s high. The Reliance Industries alone contributed 139.10 points in Monday’s 384.50 points gain. The beaten-down banks were also bounced. As suspected, the positive divergence in the Bank Nifty resulted in a bounce of over a percentage point. Traders feel the vote-on-account budget has limited opportunities for policy changes, but future commentary will certainly boost the market sentiment.
The Nifty closed above the 20DMA decisively and registered its highest close after January 16. The Bollinger bands were flattened now. The index has broken out of a Double Bottom pattern in the opening hour on an hourly chart. It formed higher high and higher low candles and closed at the day's showing a strong pullback was registered. By closing at the seven-day high, it also registered another breakout. The volumes were above average and a little lower than the previous day. The RSI is above the prior high and back to the near the bullish zone. The MACD histogram shows a significant decline in bearish momentum, and the MACD line began to rise. The Elder's impulse system has formed a strong bullish bar. Expect the positive momentum to continue till the budget day. Stay vigilant on both sides. Any negative surprises will hurt the sentiments and expect volatile moves.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
