Nifty Today: “Runaway or Exhaustion?” - 12 Jan’22

The rally continues for the benchmark Nifty index as it gains another 157 points in today's trade to post a close at 18,241. A look at the last ten trading sessions, and we notice that eight of these have been positive closes - such has been the strength and resilience of this recent uptrend. Most sectors and heavyweight stocks have also participated in this rally, but we start to notice very early signs of momentum slowdown in the Nifty and the BankNifty. Strategically one should stay on the bullish side but should not add long positions aggressively for the rest of this week. Amongst the large-cap banking stocks, it is HDFCBank which has created a bearish pattern on the daily charts alongside price momentum divergence. And so, going forward, this banking heavyweight can slow down the gains from bank nifty and probably the overall pack.

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