Bears gain upper hand if Nifty slips below 14.8k
THE domestic stock market experienced roller coaster moves on Monday. The benchmark indices gave up all the initial gains and settled on a flat note. The Nifty closed below the psychological 15,000 levels. It gained 18.10 points and closed at 14,956.20. Financial services, FMCG and Auto indices closed in negative territory.
Except for PSE and PSU Bank index, none of the sectoral indexes gained above one per cent. PSE and PSU bank indices went up by 1.82 per cent and 16 per cent. India VIX was down by 3.46 per cent and closed at 24.67. Overall market breadth was positive, and the advance-decline ratio in Nifty is 1:1. Institutional activity may become an important factor for the market as bond yields, and the Dollar index is rising.
The market was puzzled about moving on either side. Today, after opening a gap up, it did not sustain at higher levels. This is eighth straight gap opening and third straight negative closing day. The Nifty formed long upper shadow candles all these three days, indicating profit booking on every rise.
It sustained below the 20DMA for the second day. It fell 155 points from the day's high. Some sea-saw movements during the day did not fuel the sentiment or demand. It also closed below the short term 5 and 8 EMAs. As the Nifty made a higher low and higher high candle, the -DMI failed to move above the +DMI to strengthen the bears. Though it closed positively, it actually ended at much below the opening price. The long upper shadow is a good sign to go long. The RSI is still hovering around the 50 zone. MACD histogram slightly increased the bearish momentum. The Nifty sustained below the 38.2 per cent retracement level of the recent minor upswing. As long as the Nifty trades below the 15,335-20 zone, better avoid taking aggressive long positions. At the same time, it is not in a bearish market condition. A close below 14,870 will give the upper hand to the bears.
(The author is a financial journalist, technical analyst, family fund manager)
