The trend here is on the mend- but that’s about it. So, we will have to state that, as yet, this is just an upswing within the large range that we have been witnessing. For sure, we have now come to trade near the higher end of the range that was described in the last letter (25300-24500), leaving us with the same question- will we cross the upper end of the range? The situation does seem more conducive to crossing the upper end for now.
The Ichimoku indicator needs more positive feed than what it got through the five-day rise during the week. We have just made it to the level of the cloud (small effort needed to cross), the TS-KS line remains negatively phased as of Friday but very close to a crossover, the future cloud is still red so breakouts are awaited and finally, the Chikou span line remains caught within the prices.
The Breadth reading showed some improvement, with all main indices in the green for the week. That the gains were meagre (Nifty 1.48%, Bank Nifty 1.24% and Midcap 2%) also holds out for the last week’s action being labelled as an Upswing only rather than any change in even direction, let alone the trend.
There was very slight improvement in Momentum readings, as can be seen here in Table 1 from Neotrader. This shows the readings of the Multi day readings and the numbers are still quite minimal. The ADX reading has dropped a tad from the last week, suggesting lack of trend strength in the Upswing yet with the DI lines still just beyond (PDI at 28) which is hinting at some upside action perhaps. MACD has worked its way up a bit, into the positive, so that ought to be a bit of relief, as it suggests that prices have moved to being above near-term averages. Bollinger Bands are still broad apart so no signal there. RSI shows a small improvement to hit 60 levels- and needs some push to get over it. Stochastic indicator is the only one to move up some and that is in line with the five day move. Finally, the ATR reading has dropped some from the last week, and importantly, this shows that none of the five sessions of rise had any wide ranges- something that suggests some bigger buying force.
