Nifty trades above 14,800 mark; ITC forms bullish Marubozu candle

Update:On Friday, the Indian benchmark indices were in the green with Nifty and Sensex trading above their important psychological mark of 14,800 and 49,200, respectively. However, the indices were seen trading off their day’s high.   

Around 38 out of 50 stocks of Nifty index were trading in green. Index pivotal, HDFC Bank & Reliance Industries collectively contributed 28 points towards Nifty gains, followed by ITC and TCS, which contributed roughly about 18 points. Tata Steel and Bharti Airtel are also supporting the move by 7 and 5 points, respectively.   

Meanwhile, the sectoral indices were also trading in green with Nifty Metal and Nifty Media topping the charts. 

The darling of value investors, ITC is seen buzzing on the bourses today. The stock is up by nearly 1.8 per cent and it is forming a bullish Marubozu candle, which has no or minimal wicks or shadows. Moreover, the stock has seen an open interest addition of 0.59 per cent in May Futures.   

Nifty extended its upmove for the second consecutive trading session on Thursday. After opening on a positive note at the 14,668 level, the index extended its gains. However, once again, profit booking emerged at higher levels and Nifty pulled back near its 20-DMA. After taking support around the 20-DMA, it moved higher and ended the day above the 14,700 mark.   

The price action of the day formed a bullish candle with a lower shadow indicating that declines were being bought. Interestingly, Nifty closed at Tuesday's high and negated the previous day’s inside bar bearish implications.   

Going forward, if Nifty closes above 14,734 with a volume, it will give a positive bias for the overall market. Above 14,734, Nifty may face resistance at 14,800 and 14,880 levels again. We need to wait & watch for a decisive breakout above the 14,880 levels. However, if Nifty fails to surpass the resistance zone this time, the fall will be a sharper one and may even decline below 14,469. Next week's moves will be a crucial one for the market trend. As the broader indices, Nifty Midcap-100 and Smallcap-100 indices are trading at lifetime highs, the large-cap stocks lost the focus.    

The MACD histogram shows that the pickup is in bullish momentum. Interestingly, after four days, the positive directional movement indicator i.e. +DMI is up. The -DMI is still above the +DMI but is declining. The ADX is not showing any improvement in the trend strength.   

Overall, the improving market breadth and the sequence of higher high & higher low is heartening for the bulls while cherry on the cake is that FIIs turned net buyers for the first time during the week!