Stock-Specific Trading May Continue

All the directional momentum indicators are declining, which shows the momentum loss. Barring Private sector banks, all the indices were positive, and the broader

The equities traded in a narrow range. On a low volume day, the benchmark index, NSE Nifty gained 114.45 points or 0.47 per cent and closed at 24,461.15 points. Only banks were negative. The Bank Nifty is down by 0.39 per cent. The PSU Bank, and Private banks indices were also negative. The Nifty Auto and Midcap indices gained over 1.80 per cent. the Oil and Gas, Consumption, Microcap, Energy, FMCG, Infra, PSE, and Smallcap indices advanced over 1-1.70 per cent. The India VIX is up by 0.44 per cent to 18.33. The Market breadth is positive as 2023 advances and 865 declines. About 32 stocks hit a new 52-week low, and 94 stocks traded in the upper circuit. Adani Ports, SBIN, Kotak Bank, Reliance, and Adani Power were the top trading counters today in terms of value.

The Nifty tested the 61.8 per cent retracement level on the second successive day. In a 126-point small range trading day, the index opened with a gap up and sustained the opening gains. The volumes were thin. Importantly, the Nifty registered its highest closing of the last eight trading sessions. It also closed at its highest levels after December 16. HDFC Bank and Reliance protected the market to sustain above the crucial supports. The 200DMA flattened as the index has been trading above it for the past 10 days. The RSI is also flat in the bullish zone, and the negative divergence still exists. Because of the consolidation in the zone, the MACD histogram shows a decline in the momentum. All the directional momentum indicators are declining, which shows the momentum loss. Barring Private sector banks, all the indices were positive, and the broader market breadth is also positive. With this, the undertone of the market is strong enough to sustain the trend. As the index formed an inside bar, Friday’s range is crucial. Either side breakout will give a good move. A cautiously optimistic approach is needed now. Stock-specific activity will continue.

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