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Opposite to Monday’s session, today was a good day for investors, especially those who are invested in the frontline shares. The benchmark Nifty 50 index is currently up 0.88% to 17,929, by 1:55 PM IST and the majority of the sectors have pared most of the intraday losses.
Despite a negatively surprising CPI data of a 6.52% YoY uptick in January 2023, the broader markets remained unscathed and investors do not seem worried regarding a higher probability of continuation of the rate hikes. Today, US CPI data is due to be out which is probably what investors are eying on that would further clear the inflation picture globally.
Image Description: Daily chart of Nifty 50 (spot)
Image Source: Investing.com
After trading in a range for a very long time, the index might finally give a breakout on the upside. I am pre-empting, that the resistance of 18,000 (spot) where there is a humongous selling pressure present might be breached in this attempt. The index is showing good strength despite bad CPI data which is quite confidence-building.
Secondly, the highest-weighted stock – Reliance Industries (NS:) is finally taking charge. It holds around 9.98% weightage in the index and looking at its chart structure, it is probably gearing up for a good reversal. The counter has a very strong base at around INR 2,300, from where it has reversed countless times in the past. Whenever the stock touches this demand zone, a wave of bulls kicks in to support the price.
Now the stock is again reversing from this level, to change its trajectory on the upside. Considering its recent fall from INR 2,750 odd levels, there is a good potential for the stock to retrace at least 50% of this plunge, which comes at around INR 2,520. Today, the share price of Reliance Industries also crossed above the previous swing high of INR 2,370.85 which is also a bullish signal. As this is the highest-weighted stock in the Nifty, its decent rally can easily help the Nifty 50 index to break above the important resistance of 18,000. With that being said, I am just pre-empting the move in Reliance Industries which could also go wrong.
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