Weekly MACD shows fresh bullish signal
Nifty forms another Hanging Man candle; Benchmark index showing signs of consolidation as it was back into the Bollinger bands
image for illustrative purpose
Negative Market Breadth
- 1,435 declines
- 1,060 advances
- 190 stocks hit a new 52-week high
- 106 stocks traded in upper circuit
- India VIX is down by 1.60%
- RSI and MACD indicators declined
The benchmark indices were closed at a new life-time high on the neutral RBI policy. NSE Nifty gained by 68.25 points or 0.33 per cent and closed at 20,969.40 points. The Nifty IT index is the top gainer with 1.31 per cent. The Bank Nifty and FinNifty were up by 0.90 per cent each. The Nifty FMCG and Energy indices are down by 0.91 per cent each. The Pharma, Auto, and Metal indices were also closed negatively. All other sectoral indices were closed positively. The India VIX is down by 1.60 per cent to 12.47 level. The market breadth is negative as 1,435 declines and 1,060 advances. About 190 stocks hit a new 52-week high, and 106 stocks traded in the upper circuit. GMR Infra, Tata Power, and Adani Total Gas were the top trading counters today in terms of value.
The Nifty registered another lifetime high and highest closing at 20,972.15 points. It has formed another Hanging Man candle at an all-time high. For the last three days, the index has been forming similar candles and trading in the 150-point range in the 20,850-21,006 zone. The market reacted positively to a neutral RBI policy. The index has recovered 115 points in the last hour with the help of a rally in the banking stocks. The volumes were higher in the last hour. It must decisively close above the 21,006 for an uptrend to continue. On a weekly chart, it met the sloping channel target. The weekly MACD has given a fresh bullish signal, and the RSI is near the prior swing high. During the last six weeks, the Nifty gained by 1958.85 points or 10.28 per cent. There are several positive gaps in this rally.
The index is showing signs of consolidation, as it was back into the Bollinger bands. Though the index was consolidated in 156 points range for the last three days, the RSI and MACD indicators have declined from an extreme level. They formed a negative divergence. As discussed earlier, the Nifty may consolidate a few more days within the range. On the upside, the immediate target is at 21,324 if the Nifty sustains above 20,850 points. Still, it is not showing any signs of weakness, but is consolidating. As long as this consolidation continues, stay with neutral to positive bias. But if it closes below 20,850 points, the immediate support is at the 20,600-500 zone. Focus on high relative strength stocks. Money management is key in near future.
(The author is a Chief Mentor, Indus School of Technical Analysis Financial Journalist, Technical Analyst, Trainer, Family Fund Manager)
