Stay Cautiously Positive For Now

The equities rallied further to the prior high. NSE Nifty gained 289.15 points or 1.20 per cent and closed at 24,328.50 points. Only the IT and Microcap indices closed with less than 0.25 per cent. The Oil and Gas is the top gainer with 3.18 per cent. PSU bank and Healthcare indices up by 2.44 per cent and 2.07 per cent respectively. The Infra, Pharma, PSE, Energy, Commodities, Auto, Midcap, and CPSE indices gained over 1.5 per cent. The India VIX is down by 1.27 per cent to 16.94. The Market breadth is positive as 1,532 advances and 1,375 declines. About 28 stocks hit a new 52-week high, and 88 stocks traded in the lower circuit. Reliance, Shriramfin, BSE, HAL, and RBL Bank were the top trading counters in terms of value.

Reliance led the market, it contributed over 114 points to the Nifty. The Nifty tested the Friday high, but the volumes declined further, and below the average. For the last four days, the index has formed highs at the 24347-365 zone. The parallel highs are acting as resistance for now. The market breadth is neutral and only IT index is the loser. Soon after the market opened, the index rallied sharply by 284 points in the first hour. Later, the index traded in a range with low volume. The Nifty sustained above the 50-week average and reclaimed the 200 DMA. As mentioned earlier, a close below the prior day will be weaker. But it negated the implications of Friday low close. The index will move directionallyif it doesn’t trade in the resistance and supportzones of 24,365-23,847 range is. Out of this zone. Stay cautiously positive for now.

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