Nifty marches on, albeit cautiously!
Nifty closed at 11549.6 or 77.35 points up supported by “Mota Bhai”, Reliance, Banks, and Auto to some extent.
Reliance had been consolidating since the last one month in the zone of 2000-2200. Break above 2200 will be very positive for the stock as well as for Nifty as the stock controls nearly 14% weight in Nifty.
Nifty Bank has clearly broken the important resistance of 23050 and now looking to scale up to 25100, which will also be very supportive for the Nifty.
Nifty Bank is finally playing catch up with the Nifty. Although short term oscillator is showing overbought readings, Nifty Bank will continue to go up. Overbought readings are not reliable when the markets break out from the range or consolidation and they can remain overbought for a long period of time.
What’s up with Nifty?
Well, Nifty has registered a small positive candle but it’s still in the resistance zone of 11550-11650. The short term oscillator is also showing overbought readings in Nifty.
Nifty must be able to break out above the 11650 decisively with the support of heavyweights and Nifty Bank, then only this rally can be sustained.
I remain cautious as these kinds of breakouts without the momentum can turn out into false breakouts.
There are no signals for tomorrow and I have no open positions as per my Swing Trading Model.
Have a great expiry tomorrow!
*** This is not an investment advice and only for information and educational purposes.