Nifty forms another big bullish bar

The Nifty continued its rally for the third consecutive week and gained by 352.50 points or 2.3 per cent in the last five trading sessions. The rally was mainly because of Reliance Industries's 12 per cent rise and the PSU banks. On Thursday, it opened with a gap-up, but did sustain at the opening highs. At the end, it closed at 15690.35 with 114.15 points gain. After two days of subdued closing, it bounced sharply in the second half of trading. Barring Nifty Pharma and Auto indices, all other indices closed higher. The Realty index is up by 3.79 per cent, and the Media and Infra also up by over one per cent. The Bank nifty advanced by 0.78 per cent, and the Fin nifty gained 0.96 per cent. The Nifty Smallcap-100 index is outperformed by 1.21 per cent. Overall market breadth is positive as 1334 advances and 594 declines. 174 stocks hit the 52 weeks high, and 226 stock hit the upper circuit. Technically, it formed another hanging man candle. The Nifty traded in just 82 points range on a weekly expiry day. It just closed above Tuesday's high. In fact, it closed at a new lifetime high. On a weekly chart, it formed another big bullish bar. The histogram shows a significant decline in bearish momentum. But, the daily momentum gives a slightly different picture. The RSI (71.55 entered the overbought zone. Even after breaking out of 68-day cup, it has up by over 2.5 per cent. The current structure suggests, there is a probability of counter-trend consolidation. Or may retest the cup breakout level. But, be with the trend as long as it trades positively. A close below the previous bar low will indicate the beginning of the counter-trend. The immediate target is at 15784 if the trend continues.

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