Wait for a decisive range breakout
RSI in bullish zone; MACD histogram shows a flat momentum and VIX is up by 0.70%
Positive Market Breadth
- 1,389 advances and 1,083 declines
- 193 stocks hit a new 52-week high
- 129 stocks traded in the upper circuit
- Nifty forms a Shooting Star candle
- Above 19,875pts, rally likely
The benchmark index erased the last two days’ losses and closed higher. NSE Nifty gained by 89.40 points or 0.45 per cent and closed at 19,783.40 points. The metal, media, pharma, and realty sectors were the top gainers with over a percentage point gains. The IT, FMCG, and PSU Bank indices closed marginally lower. All other indices registered decent gains. India VIX is up by 0.70 per cent. The market breadth is positive as 1,389 advances and 1,083 declines. About 193 stocks hit a new 52-week high, and 129 stocks traded in the upper circuit. HDFC Bank, Tata Investment, and Bajaj Finance were the top trading counters today in terms of value.
The Nifty traded within the last Thursday’s range for another day. It formed a Shooting Star candle. In a lackluster trading, the Nifty did hold the opening gains. The volumes were higher than the previous day. As the Nifty is still in the zone, there are no major changes in price structure. Only in the case of breaking out of the 19,627-875 range will we see a directional bias. The Bollinger bands began to expand, which is a positive indication. The 50 DMA is still flat, and the Nifty is 0.98 per cent above this key moving average.
The RSI entered into the bullish zone. The MACD histogram shows a flat momentum. The Elder’s impulse system has formed another neutral bar. After two days of consolidation, a positive closing indicates buying strength is regaining. To continue the rally, it must close above the 19,875 points. The index is hesitant to register strong moves. Interestingly, the index has not formed a lower low since Wednesday. For a downside move, it must close below the prior day’s low and 50DMA. It is better to wait for a decisive range breakout to take fresh positions.
[Chief Mentor, Indus School of Technical Analysis Financial Journalist, Technical Analyst, Trainer, Family Fund Manager]
