19,200 level for Nifty in sight
There are no weakness signals, but there are indecisive moves because of profit booking in short-term; Continuation of the trend will test the new high; Now, the support has moved higher to 18,211; Below the range of 18,211-284, profit booking likely
With the last hour's aggressive buying support, the equities across the board sharply moved higher. The benchmark index, NSE Nifty closed higher by 74.25 points or 0.41 per cent. Only FMCG, Realty, and Media indices closed marginally lower. All other sectoral indices gained less than a per cent. The Bank Nifty and the Auto indices were the top gainers with 0.70 per cent and 0.64 per cent. The remaining indices closed with less than half a per cent. The market breadth is negative as 996 advances and 897 declines. About 71 stocks hit a new 52-week high, and 76 stocks traded in the upper circuit. ICICI Bank, Adani Ports, and HDFC Bank were the top trading counters on Tuesday in terms of value.
The last hour of trading changed the directional bias of the Nifty. It traded in the first-hour bar range, mostly below the opening level. With the last hour's most bullish candle, the Nifty has made another high after 18th October 2020. By closing above the previous bar high, it erased yesterday's weak signals. The index rallied 118 points in just 75 minutes. On the hourly chart, the MACD is about to give a fresh buy signal. There is no weakness in any time frame. Even on the weekly time frame, it has formed the highest closing and higher high candle. The RSI has broken out of a range closed above the prior swing high. It is also above the sloping trend line resistance.
As we keep mentioning that there are no weakness signals, but there are indecisive moves because of profit booking in short-term. Now, the support has moved higher to 18,211, which is 8EMA. The 5EMA and Tuesday's low are almost at the same level at 18,284. Only below this range (18,211-284), the profit booking may be intensified. As mentioned earlier, the 18,420 has been achieved. A continuation of the trend will test the new high. It may hit 19,200 in the short term. Keep your distance from the bearish view.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
