Weekly RSI Hovering In Neutral Zone

The equities ended on a positive note with all-around buying support. NSE Nifty gained 239.35 points or 0.97 per cent and closed at 24,851.20 points. Only Nifty Pharma and Defence indices are the losers on Friday with modest losses. Nifty FMCG is the top gainer with 1.65 per cent. The Private Bank Consumption, Services, FinNifty indices gained over one per cent. All other indices advanced less than a per cent. The India VIX is at 17.34. The market breadth is positive as advances (1,713) outnumbered the declines (1,139). About 50 stocks hit a new 52-week high, and 91 stocks traded in the upper circuit. BSE, Waree Energies, GRSE, R Power, and Mazdock were the top trading counters today in terms of value.

Nifty formed a Hanging Man candle and an inside bar on the weekly chart. It declined by 151.90 points or 0.60 per cent last week in a yo-yo kind of trading. The index declined for three days and advanced for two days. It sustained above the 20DMA and closed above the 8EMA. The volumes were relatively lower and closed above the prior day’s high. The weekly volumes were also lower. The Bollinger bands are in the uptrend and contracting. After the weekly expiry day, the intraday volatility is much lower than the previous day. The RSI is in the neutral zone, and the MACD did not show any improvement in the momentum. The weekly RSI is also in the neutral zone. As mentioned earlier, the previous week’s range of 24,378-25,166 is crucial for directional bias. As it is near the high, expect a breakout on the upside. Only in case of a decline below the 20DMA 24,553 points, and Thursday’s low of 24,462 points, expect a reasonable decline. As we forecast, the consolidation will continue for some more time. Stay neutral to positive bias.

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