Can there be a fairy-tale ending for Indian markets on Friday?

The daily MACD is about to give a fresh buy signal while the weekly momentum has increased for the last five weeks.

After huge volatility of 518 points, Nifty made a new lifetime high twice during the week. It made a new lifetime high last Friday but declined 467 points in just two days. However, it recovered in the last three days to make a new high. Indian equities reacted positively along with global markets at US Federal Reserve policy outcome. Since the last weekly expiry close, Nifty has gained by 193.45 points or 1.1 per cent.      

Technically, the benchmark index has no resistance for now, as it is trading in uncharted territory. The supports have inched up by 17,326 or at least the previous bar’s low of 17,646. Barring Wednesday (NR4 formation), all the other four days had experienced a daily range of over 250 points.   

On a lower timeframe, the index has formed a cup formation, which is bullish in nature. In any case, if Nifty closes above the 17,865 level, it can touch the levels of 18,000 and 18,197 on the upside. Currently, there is a strong bullish weekly candle that depicts the bull's strength. The RSI and other indicators reached an overbought condition again. The RSI may continue to be in the zone of 70-80 for the near future. Only a move below 60 will give us clues for the negative bias.   

The daily MACD is about to give a fresh buy signal while the weekly momentum has increased for the last five weeks. The 20-DMA (17,315) and Tuesday's low (17,326) are at the same level. Hence, this is a key level to watch out for in the short term. There is no change in the current bull trend in any timeframe.