Stochastic RSI Gives A Fresh Bullish Signal

The fresh week started with a positive bias, with all-around buying support. The benchmark index Nifty gained 148 points or 0.60 per cent and closed at 25001.15. All the sectoral indices were positive, with the Nifty India Defence, Auto, and IT indices gained by over one per cent. The FMCG, Metal, Realty, Energy, Consumer Durables, and PSE indices gained over half a per cent. The India VIX is up by 4.30 per cent to 18.02. The market breadth is positive as 1735 advances and 1173 declines. About 53 stocks hit a new 52-week high, and 127 stocks traded in the upper circuit. BEML, BSE, Eternal, Mazdock, and Balakrishna Industries were the top trading counters in terms of value.

The Nifty is back above the 25000 levels with fresh buying support. The Nifty closed above the prior day’s high. It is still trading within the range. It almost reached the recent high of 25116. The volumes are a concern now. Even with the positive bias and all-around buying support, the volumes did not pick up. In fact, during consolidations and pattern formations, the volumes generally recede. The index traded within the first hour’s range. It failed to continue the momentum after the first hour’s massive 236-point move. The RSI moved above the 60 zone. The Stochastic RSI has given a fresh bullish signal. The ADX line is still declining, showing trend strength yet to improve. Watch the 25116 resistance for a breakout. A decisive close above this will result in a breakout and test 25350, initially. The index may not witness a massive spike if the buying support does not emerge. The monthly expiry is scheduled this week, expect more volatility. The Nifty VIX is continuing to rise as it is up by 4.24 per cent. The old-economy stocks, Reliance, M&M, ITC, and L&T, lead the market today. They together contributed about 70 points to the Nifty gain. As stated earlier, stay with positive bias as long as it trades above 24000, and stay vigilant.

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