Indicators signal bullish candle
The all-time high is just 107 pts away; There’s every probability that Nifty can reach a new high in next 2-3 sessions
But a close below 19,836 is negative and the index will enter again into a counter-trend consolidation
What’s Up
- Gap-up opening
- Volumes above average for last 2 days
- 156 stocks hit a new 52-week high
- 87 stocks traded in the upper circuit
The equities rallied strongly and reclaimed above 20,000 level. NSE Nifty closed at 20,096.60 with 206.60 points or 1.04 per cent gain. The Bank Nifty, FinNifty, IT, Auto and Private Bank indices gained over 1.5 per cent. Only the Realty and Media indices were down by 0.50 per cent and 0.13 per cent, respectively. All the other sectoral indices closed with decent gains. The India VIX is up by 4.37 per cent and closed at 12.70. The market breadth is positive as 1,324 advances and 1,164 declines. About 156 stocks hit a new 52-week high, and 87 stocks traded in the upper circuit. The newly listed IREDA is the top trading counter today. HDFC Bank, Adani power, Reliance, and Zomato were the top trading counters in terms of value.
The Nifty cleared the psychological resistance of 20,000 at ease. As discussed on Tuesday, the market structure has changed decisively to a confirmed uptrend. A significant improvement in the volume shows the buying interest. The volumes were above average for the last two days, which is a strong bullish sign. It almost filled the 20th September gap. The Nifty has formed a strong bullish candle after a gap-up opening. It also registered a follow-through day after Tuesday’s bullish close. The RSI moved above 70, and the MACD showed a strong bullish momentum. These two indicators are in an extremely overbought zone on the hourly chart. It may lead to profit booking on the monthly expiration day. The all-time high is just 107 points away, and there is every probability that the Nifty can reach a new high in the next two to three days. Even after this strong move, the 50DMA is still flat. If this average turns up, the rally will continue to further highs. Only a close below today’s low of 19,956 will give signs of weakness. But a close below 19,836 is negative and the index will enter again into a counter-trend consolidation. Let us be with positive bias as long as Nifty trades above this zone.
[Chief Mentor, Indus School of Technical Analysis Financial Journalist, Technical Analyst, Trainer, Family Fund Manager]
