Nifty greets RBI policy, closes at lifetime high
The stock market welcomes the RBI's neutral monetary policy with another lifetime high close. Barring Energy, all the sectors participated in the rally. The volatility index India VIX declined further.
18.18 level. The Nifty rose by 124.65 points and closed at 13258.55. The Banknifty advance over two per cent and above 30,000 levels. FMCG, Pharma, Metal and Consumption sector gained by over one per cent. 1085 stocks advanced while 811 stocks declined. 323 stocks closed unchanged in today's market. 161 stocks registered new 52-week high today, and only five stocks closed at their 52-week low.
The Nifty closed above the previous day's high and at the day's high. After testing yesterday's near low, it closed almost at day's high. It has decisively broken out the 13-day range. This fresh breakout target placed at 13,534, which is 161.8 per cent extension of the previous swings. After a series of indecisive and bearish candle, it formed most bullish candle in recent times. Today's move also negated the last week's Doji candle's bearish implications. As the Nifty did not make any lower low, formed another higher high is a trend continuation sign. And there is no weakness or indecisive sign visible now.
However, there are some concerns still present. Though the Nifty moved higher, the leading indicator RSI hasn't made a new high. The momentum hasn't picked as equivalent to price rise. The Bollinger bands further contracting. Even though the derivative volume higher than the previous day, they are still below the average.
The Put-Call Ratio (PCR) is at the highest level after March lows. This is one of the indicators to identify the tops and bottom. As a trend following trader, be with the trend and do not try to short in current conditions. Be with a cautiously optimistic view.
(The author is a financial
journalist, technical analyst,
trainer, family fund manager)