By Anand James
We had opened last week with the expectation of a bounce back, but had earmarked 15600 as an important challenge for NSE Nifty 50 to cross. The first break of this mark early in the week, proved to be brief and found distribution thereof, giving bears several opportunities to head lower. However, none of them could dominate the bargain buying interest that kept surfacing on every slippage beyond 15400, acknowledging the significance of 15300 which was in fact the first projected target for the downtrend.
After a tumultuous week, when the NSE 500 index managed to close just about a percentage in green on Friday, 79% of the index constituents advanced hinting at a broad based positivity. A quarter the NSE 500 stocks have crossed the wall of worry by breaking above the 5 day high. An 84% advance-decline ratio in the small cap index, which rose 1.76% on Friday, also suggests that risk appetite is robust. But only 18% and 23% of the small and mid cap indices have crossed the 20 DMA mark suggesting that the rally does have more legs in the coming days, before bears smell exhaustion.
(Anand James, Chief Market Strategist at Geojit Financial Services. Views expressed are the author’s own.)