Better to stay sideways as indecisiveness exists
Nifty formed Dragonfly Doji candle on charts along with Doji candle at swing high, indicating tiredness, but it needs confirmation for bearishness; 5EMA once again acted as strong support
The domestic market moved high with broader market participation and improved volume. The NSE Nifty gained by 85.65 points or 0.47 per cent and settled at 18,202.80.
This is the third highest closing in Nifty history. The PSU Bank index is the top gainer with 4.46 per cent. The Metal, Auto, Bank Nifty, Fin Nifty and Realty indices were up by 1 to 1.5 per cent.
Only the Pharma index is down by 1.43 per cent. The remaining sectoral indices gained by 0.17 to 1 per cent. The market breadth is positive as 1142 advances and 766 declines.
About 92 stocks hit a new 52-week high, and 112 stocks traded in the upper circuit. SBI, Adani Enterprises and Bank of Baroda were the top trading counters on Monday in terms of value.
After a volatile session, the benchmark index closed at a new swing high. It formed the Dragonfly Doji candle. The Nifty opened with 95 points positive gap.
It did not sustain at opening highs and traded in the negative zone for a short period. With the recovery in the afternoon session, the Nifty is able to close at the swing high.
Technically, the index cleared the resistances on a closing basis. Though the indecision still persists, the market did not confirm any kind of weakness. The intraday dip has been taken as an opportunity to buy.
Importantly, the Nifty has not formed a lower-low candle. The 5EMA once again acted as strong support. The Doji candle at the swing high is an indication of tiredness, but it needs confirmation for bearishness.
A negative opening and closing will give some hope for the bears. The positive market breadth and the higher volume indicate strength in the breakout. Because of the indecisiveness, it is better to be with a neutral stance and avoid the aggressive leveraged positions. Stock-specific activity and sector rotations keep moving the market. As mentioned earlier, the PSU banks are very strong.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
