All the sectors have participated in the last three-day rally. From the next week onwards, the market will move on its own credentials. We may see consolidation and lower daily range

The benchmark index Nifty closed near to previous record high and erased all the losses. NSE Nifty gained by 468.75 points or 2.05 per cent on Friday. The Nifty IT is the top gainer with 3.37 per cent. The PSE and auto indices are up by over 2.5 per cent. All other sectoral indices advanced by 1.01 per cent to 2.4 per cent. The India VIX closed at 16.8 with a 0.49 per cent gain. The Market breadth is positive as 2,169 advances and 489 declines. About 122 stocks hit a new 52-week high, and 179 stocks traded in the upper circuit. Infosys, HDFC Bank, Reliance, and HAL were the top trading counters today, in terms of value.

Nifty has recovered all losses of Tuesday’s decline. It recovered 1,907.40 points or 8.96 per cent from the low. It closed above the prior week’s high. On a weekly basis, the index has gained by 709.25 points or 3.15 per cent. The index closed at the rising channel’s resistance on the weekly closing. The Nifty closed almost at the weekly opening price. The Nifty has formed a pin bar or a Doji candle, which covered the last five months’ price action. The index has registered the highest closing in its history. If we see the line chart, which considers only closing prices, not the intraday ranges, it shows a clear uptrend, broken out of a channel. The volumes were recorded highest after February 2021. As we expected, the volatility has collapsed to the mean level, with two major event risks: elections and RBI monetary policy.

All the sectors have participated in the last three-day rally. From the next week onwards, the market will move on its own credentials. We may see consolidation and lower daily ranges. The 23,339 points, Monday’s high, is the immediate resistance. Above this level, it can test 23,550 and 23,700 points. Today’s low of 22,789 will be with short-term support. A close below this will test the 20 and 50DMAs. The broad range for the next two weeks is 23,550-22,500 points. In this thousand-point range, stay with selective stocks and manage the risk.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)