Charts indicate no trend change signs

The benchmark indices closed higher for the third successive session. NSE Nifty is up by 44.35 points or 0.25 per cent. Nifty Realty is the top gainer with 1.36 per cent. The FMCG and Auto indices are up by 0.71 per cent and 0.53 per cent, respectively. The Metal and Energy indices are down by 0.44 per cent and 0.09 per cent, respectively. All other indices gained or lost by less than half a per cent. The advance-decline ratio is 1.26. About 56 stocks hit a new 52-week high, and 57 stocks traded in the upper circuit. RVNL, ICICI Bank, HDFC Bank, and Axis Bank were the top trading counters today in-term of value.

The Nifty negated the previous day's Evening Star Dojo’s bearish implications by closing above its high. The index is decisively above the Anchored VWAP. It also closed above the prior breakout level. The broader market participation has improved today. But the volume declined. Almost 50 per cent of the volume registered in the first hour. As the Nifty is still in the previous week’s range, there are no trend change signs. A decisive break-out of the last seven day’s range will lead to a sharp upside. It may rest at 18,115 points if it closes above 17,863 decisively. For now, there is no weakness visible. For now, Wednesday’s low 17,711 points will act as crucial support. As the March monthly derivatives expiry is scheduled, expect wild moves, as the VIX and the Implied Volatility are at the lowest levels for the last five days.

The earlier base was 10 days old at the bottom. Now, on the top, it forms a base for the eight days. In the next two days, another leg of the rally will be initiated if it ends the consolidation and breaks above the 17,863 points. We stated earlier in this column that April month generally positive and May is negative. Most of the sharp declines happened in the month of May. Stay with the utmost caution, and volatility may hurt you. Avoid indices and focus on stocks for next month’s contracts.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)