Will Nifty move above 15,900?

The equity market bounced on the monthly derivatives expiry day. The NSE Nifty up by 69.05 points and closed at 15,778.45. The Metal index shined on Thursday by 5.02 per cent and led the market rally. The PSU Banks, Realty, and IT sectors were in the limelight today. FMCG index declined by 1.02 per cent, and Auto, Pharma indices were down by half a per cent. The Midcap and Smallcap indices outperformed the benchmark index. The India VIX is down by 5.46 and settled at below 13. The overall market breadth is positive as 1,180 advances and 743 declines. About 189 stocks hit a new 52 week high, and 189 stocks traded in the upper circuit.

The Nifty continues to move around the 20DMA, with an increase in daily ranges. It took support at 50DMA twice during the last seven days. During the consolidation, the swings were limited to only two to three days. The Nifty is still at the 7th June level. It has not moved anywhere during the last two months. Since July 1, the Nifty rose just 61 points, and exactly at the mid-point of consolidation range. Because of this sideways action, the Bollinger bands are moving like parallel lines. The momentum is completely neutral. There are some positives that appeared in the index after Wednesday's big move. The price made a lower low, but the RSI made a higher low. This condition is meeting Andrew Cardwell's rules for bullish entry.

Unless the RSI closes below 48, the index may trade with a positive tone. The daily +DMI is showing an uptick, and the ADX crossed the double-digit figure, which shows the positive strength is improving. It formed a hammer kind of candle on Wednesday, which is also bullish, and closing above its high is a confirmation to the bullishness. Now, whether Nifty can move above 15,900 decisively or not, that's the question will be answered in the next two to three days. The consolidation in the near mature stage. A complete bar closing above 15,900 along with RSI above 56 is a very positive sign, which can test 16,240 initially with a sharper retracement. The index behaviour is very important at this level to forecast future trends.

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