Strong bullish momentum likely
The breakout and RSI range shift into the bullish is another positive factor for the market
image for illustrative purpose
With a robust rally in the public sector enterprise stocks, the markets closed on a strong note. The Nifty gained by 92.90 points or 0.47 per cent and closed at 19819.95. The PSE index is the top gainer with 2.63 per cent, followed by the Nifty Realty index with 2.12 per cent. The CPSE index is also up by 1.80 per cent. The Energy and Infra indices are up by 1.39 per cent and 1.15 per cent, respectively.
The Nifty Media, Pharma, FMCG and IT indices are down by less than one per cent points. About 181 stocks hit a new 52-week high, and 82 stocks traded in the upper circuit. Mazdock, Reliance, and HDFC Bank were the top trading counters today in terms of value.
The market rallied for the sixth straight session. The Nifty opened above the previous day’s high and closed at a 78.6 per cent retracement level. It reclaimed the above 19800 levels. The Index is just less than 200 points away from its high. Today’s volume is just below the previous day but recorded at an average level.
As mentioned earlier, this six-day rally is supported by volume, which is a strong positive point. This is the third day above the flat base pivot level. The breakout and the Relative Strength Index (RSI) range shift into the bullish is another positive factor for the market.
At the same time, today’s close is the third-highest closing. This 600-point rally in six days has erased the bearishness of the 28-day downtrend of 768 points. For the next 2 -3 days, the Nifty may move with a slower pace, as today’s candle is completely out of the Bollinger bands. The heavy-weight sector index, Banknifty, also registered a base breakout today with a higher volume than the previous day. The moving average convergence/divergence (MACD histogram shows a strong bullish momentum.
The positive directional movement index (+DMI) shows a strong positive momentum in the Index. The Nifty is above the Anchored volume-weighted average price (VWAP) resistance and monthly VWAP. For now, stay on trend for another 2 - 3 days. The upside target is the new high, with a high probability. Maintain a stop loss at 19727 as the stop loss for the long positions.
