Market breadth negative
For the third straight day, the equity market declined by over one per cent. On the weekly derivatives expiry day, the frontline indices traded volatile. The NSE Nifty declined by 181.40 points or 1.01 per cent and closed at 17,757 points. The Metal and Realty indices closed positively with 0.52 per cent and 0.23 per cent, respectively. All other sector indices declined on Thursday. The Pharma and IT indices declined by 1.66 per cent each.
FMCG fell by 1.15 per cent. Other sector indices decline by half a per cent on average. The market breadth is neutral as 1,045 advances and 1,005 declines. About 123 stocks hit a new 52 week high, and 142 stocks traded in the upper circuit.
The Nifty fell sharply for the third consecutive day and the decline of over three per cent in the last three days erased hopes of a new high before the budget. It is able to protect the 20DMA support with 100 point recovery in the last hour. The Nifty closed below 21 EMA and almost tested the previous swing high, which is a breakout level. It almost tested the 38.2 per cent retracement level and 50DMA. As the index tested many supports and bounced in the last hour, it may extend its pullback towards 17916 levels. But, it may face a stringent resistance at 17814. The 21 EMA resistance is at 17803. Only an hourly closing above 17814 is positive, and it can test 17916.
The three days of sharp decline wiped out ten days of gains. For the second day, the market breadth is negative. For the last three days, volumes recorded above average, and today's volume is the highest in the last three days. This shows the distribution is high for these days. During this weekly expiry, the Nifty futures ended up with 479 points decline. This is one of the highest declines in the last year. Earlier, on 28th January and 18th March, weekly expiry declined by 772 and 616 points. As mentioned on Wednesday, the 17600 zone will act as key support. A minor pullback is possible. But only above the 17814 will be positive. Any decline below the 17750 will resume the downward move.
(The author is financial journalist,
technical analyst, family fund manager)