Mkt moving higher despite negative sentiments

By discounting all the negative sentiments, the stock market is moving higher and higher. The benchmark index, the Nifty, reached an important resistance level. It gained 211.50 points and closed at 14,864.55. The BankNifty was up by 3.02 per cent and FinNifty advanced by 2.89 per cent. Pharma, metal and realty indices were the laggards today with half a per cent losses. The auto index was up by 1.68 per cent. The broader indices Nifty-500, Midcap-100 and Smallcap-100 indices were up by over one per cent. The market breadth is positive as 1,179 advances and 708 declines.

The Nifty once again reached 14,880 resistance level. It rose over 5 per cent or 738 points from the last Thursday's low. The current upswing is the sharpest one compare to the previous two swings and has not moved in a zig-zag behaviour. It is time to a close watch for 14,880 levels, as it tested for six times in the recent past. As a classical technical philosophy says, the seventh resistance or support is a very rare phenomenon. In case it breaches and close above the 14880, it will lead to a further sharp rise. The Nifty retraced 50 per cent of the 16th February to 22nd April fall. The 61.8 per cent retracement level is at 14957, which may act as resistance for this week. After taking support at 100DMA, the Nifty now closed above all the short term moving averages. The MACD has given a buy signal. The DMIs are at an influx point. The ADX has not shown strength. The Nifty futures volume is still below the average for the past six days. The open interest declined because of the monthly expiry tomorrow. The volatility may increase. This is time to be cautious as the Nifty reached an important resistance. In any case, it failed to move above the resistance, and the downswing will start post expiry. But, there are no negative indications on the chart for now. The 14,880-957 zone of resistance is critical for this week.

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