Nifty added more gains on Tuesday as it showed strong strength to end a new lifetime high for the second day in a row. Also, on the second day, Nifty registered a gain of more than 200 points. Global markets were soft in the morning and Nifty remained flexible but remained weak in the first hour of trading.
However, the index got stronger as the day progressed and navigated the 17,000 level and moved higher. The market saw some sharp momentary gains in the middle of the day. However, losses were limited and the index hit new highs again.
The headline index finally closed with a strength of 201 points or 1.19 percent. Nifty is now clearly overbought and very high for consolidation at current levels. However, the manner in which Nifty has profited for a very short time and then recovered is a clear indication of the never-ending strength in the market.
However, we have to keep this in mind and avoid any major shortfalls. Chasing growth, regardless of its strong behavior, it is time for traders to be extra cautious and protect profits at higher levels.
In an unusual practice, market volatility increased; India VIX rose 9.02 percent to 14.5200. The 17,150 and 17,200 levels are now likely to act as resistance; Whereas support is likely to come at 17,000 and 16,950 levels. Any corrective move or consolidation is now expected to widen the trading range.
The relative strength index (RSI) on the daily chart stood at 82.49; It has marked a new 14-period high and is a bullish signal. The RSI remains strongly overbought but neutral and shows no divergence against the price. The daily MACD is forming and above the signal line. A strong white body appeared on the chart; This shows market consensus on strong upside directional potential.