The market action on Friday the 13th delivered a potent mix of volatility and bullish momentum, with significant implications across major indices.
Nifty had a mind boggling swing of more than 600 points in a monster move that broke the narrow range of the past 5 days on the downside before closing above the range near the previous swing high.
The daily candle of Friday has formed a Bullish Engulfing Hammer while closing above a narrow trading range. The confluence of bullish signals strongly suggests the potential for follow-through buying. The prior swing high could now act as a launchpad for the next leg higher. Look at the daily chart below.
Fig 1 - Daily Chart of Nifty showing a strongly bullish hammer on Friday above a narrow range
In a similar move, Banknifty has formed a massive Bullish Engulfing Hammer that has enough firepower to propel it to test prior high ~ 54470. Daily chart below.
Fig 2 - Daily Chart of BankNifty showing a massive Hammer that almost closes above the preceding 5 day narrow range
CNXIT, already at all time highs, closed at a fresh all time high on Friday. Daily chart below.
Fig 3 - Daily Chart of CNXIT showing price closing at an all time high last Friday
The broader market as reflected in the CNX Midcap and CNX Smallcap, has recovered over the past 4 weeks with price trading near all time highs. This is despite the rupee trading at new lows against the USD, inflation showing no signs of abating and US Treasury yield rising back above 4.4%! Respect for the market as it defies all conventional logic to continue to surprise on the upside.
Expect the market to continue moving higher over the course of the next week or at least in the early part of the next week.
Please scroll down to the bottom of this post to subscribe to the mailing list for regular market and trade updates.
Comentarios