Nifty set to march on with least signs of tiredness

The banks erased their two-day losses, and the Autos continued the rally with upgrades on the industry. Infra and Reality sectors traded positively with budget expectation. IT, Pharma and FMCG were the laggards in today's market. The perfect sector rotation helped the market to close at a new lifetime high. The Nifty closed at 14,563.45 with a 78.70 points or 0.54 per cent gain. The advance-decline ratio is at 1:1. The relentless buying from FIIs is pulling the market from every dip. The retail participation increased in the Mid and Small-cap space.

As the history says, another bearish pattern negated with over 140 points move from the day's low. For the past few months, almost every intraday dip is being used for the buying opportunity. As the Nifty closed at much higher than the previous bar high, there is no weakness.

Even on the shortest time frame, it is not showing least tiredness. In fact, it engulfed the prior bar, which strong bullish signal. It met our target of 14,515 and still moving higher.

The next level of resistance is at 14,660. The support zone moved further higher to 14,378-14,277. All the short term averages are trending up. Unless the prices close below this support zone and the short term 5EMA and 8EMA turns down, be positive on the Nifty.

The RSI reached above 80 and near to the earlier high. Interestingly, the ATR is coming down. The linear regression slope is also much below the prior high. These are not good signs in a normal condition. As we are in a neo-normal environment, it is better to wait for weakness confirmation for a bearish view. Until then, continue the long positions with a strict trialling stop loss.

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