Nifty recovers, on upswing; likely to cross 14.7k mark
Gains 143 points; all the sectoral indices are positive. Pharma index declined by 0.87 %
Nifty forms strong bullish breakout candle
The Banks and heavyweight stocks lifted the market above the key resistance area. The Nifty closed at 14,485 gaining 143.65 points. Barring the Nifty Pharma index, all the sectoral indices are positive. Pharma index declined by 0.87 per cent.
The Reality and the Metal indices were up by 3.4 per cent and 2.01 per cent, respectively. With the over 4 per cent rise in ICICI Bank, the Bank Nifty was up by 1.74 per cent and the FinNifty advanced by 1.30 per cent.
Nifty-500 advanced by 0.92 per cent. India VIX also was up by 3.55 per cent and closed at 23.495, is the highest level since 9th March. Any further rise may give an indication of the more volatile sessions. The market breadth is positive as 1,239 advances and 660 declines were recorded.
With the smart recovery in BFSI and the heavyweight stocks, the Nifty finally reached above 14,470. It also closed above the 100DMA. The RSI bounced from the support line once again and closed above the 45 zone. The bearish momentum further declined, shows the MACD histogram.
It almost filled the last Monday's gap. It avoided another black Monday. On the negative side, the Nifty faced resistance at 20 DMA and formed a shooting star like candlestick. It traded mostly within the first hour's range.
With the consistent selling pressure, the Nifty formed lower highs. It failed to cross or close above the previous hourly bar. On the 15 minutes time frame, too, it was unable to form a higher swing high.
Interestingly, the Nifty formed a similar candle like 16th April. As the monthly series expiring this week, the short covering was seen, as the derivative volumes declined, and the open interest also modestly increased.
As there are positives with equal negatives in today's move. The market needs a follow-through day to continue the rally. In case, the Nifty closes above the 20DMA (14,577), the positiveness will continue and Nifty will move above 14,700. Otherwise, a close below 14,469 is negative.
(The author is financial journalist, technical analyst, family fund manager)
