Daily RSI Flat, Indicates Consolidation

With two impulsive moves, NSE Nifty advanced by 4.18 per cent during the week. On Friday it declined by 42.30 points or 0.17 per cent and closed at 25,019.80 points. The Nifty India Defence sector is the top gainer with 5.60 per cent. The Smallcap, and PSE indices gained over 1.80 per cent. The Realty, CPSE, and the Media indices up by over one per cent. The Nifty IT is the top loser with 0.84 per cent. The Services, Infra, and Metal indices declined with moderate losses. The India VIX is down by 2.03 per cent to 16.55. The Market breadth is positive as 1,968 advances and 911 declines. About 57 stocks hit a new 52-week high, and 175 stocks traded in the upper circuit. Bharti Airtel, Cochin Shipyard, Mazdock, GRSE, and HAL were the top trading counters, in terms of value.

Equities took a breather after yesterday’s violent move.

The Sebi ordered an enquiry on the market moves on the derivative expiry day. The Nifty traded in a 123-point range on lighter volume. On a weekly closing basis, the Nifty closed above the prior major swing high. The weekly volumes were also highest after the first week of June 2024 There are several positive indications of renewed bull strength in the market direction. As the rally was impulsive, we see some retracement or counter-trend consolidations. As the daily RSI is flat even after a massive rally, is an indication of probable consolidation. The rally is supported by Defence, PSU, and BFSI stocks. As the market breadth and trend strength are stronger, the rally may continue. As long as the index trades above 24,400, be with a positive bias. On the upside, the Nifty may face resistance at the 25,200-450 zone. Stay with stronger stocks with higher relative strength.

(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)