RSI on all time frames in overbought zone

The domestic stock market continued its restless rally and ended its fifth straight gaining week. The benchmark index, Nifty, traded in the 408.30 points range and closed with 313.25 points or 1.30 per cent net gain. BSE Sensex is up by 1.22 per cent. The broader market indices, Nifty Midcap-100 and Smallcap-100, advanced by 2.43 per cent and 3.40 per cent, respectively. On a sectoral front, the Nifty IT gained by 4.32 per cent, and Pharma is up by 3.66 per cent. The PSU Bank index is the only loser, with just 0.12 per cent. The FIIs bought Rs6,874.66 crore, and the DIIs sold Rs385.29 in the first week of the current month. The India VIX is down by 8.02 per cent to 12.69 per cent. The market breadth is positive for the week.

The Nifty continued its positive momentum last week and closed at another new lifetime high. As we forecasted in June last year, the current rally is a result of an 86-week Stage-1 consolidation. In the previous 55 weeks, the Nifty rallied by 5,869 points or 31.67 per cent. The Index is moving in a systematic bullish trend. After breaking our 73-week ascending triangle in 2014, the Index rallied by 100 per cent by January 2020. This is the historical repeated behaviour of the Nifty. It rallied by 100 per cent when it declined more than 25 per cent for many times. Post-2020 decline of 38 per cent, the Index rallied by 147 per cent in 19 months.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)