Bulls losing control of market

THE equity market witnessed the selling pressure and closed with minor losses. But the last hour, declining is not giving good indications for the near future. The Nifty closed at 15,763.05 with a 15.40 points loss. The Nifty Pharma recovered by 3.63 per cent. Media and Auto indices also closed with one per cent gains. Metal index decline by 0.70 per cent. All the other indices moved in a narrow range and closed with either half a per cent gain or loss. The India VIX closed at 12.8025. The overall market breadth was positive as 1,052 advances and 854 declines were recorded. About 183 stocks hit a new 52-week high, and 169 stocks traded in the lower circuit.

The Nifty has formed a perfect Doji candle on a monthly chart. For the last two months, the benchmark index has not moved much. The hesitation at the top, on a low VIX indicating storm, is on the cards. There are several historical evidences that suggest, the Nifty has made an intermediate top. The 31 days long, 200 points range is about to break next week. The Nifty formed a bearish shooting star today and bearish engulfing candle. It also closed below the 20DMA. Even on the weekly chart, it has formed a lower top and lower bottom candle with a small body. The negative divergences are clearly visible and waiting for bearish confirmation. The overall market breadth in the month is almost negative. The sector rotation and the stock-specific activity is keeping the market alive. The index opened with a positive bias and reached almost four days' high, but with renewed selling pressure, it declined over 100 points from the day's high. It signifies that the bulls are losing control of the market. Next week's closing will give the clues for the medium to the long-term trend. Be ready for taking out the profits from the table.

--

Chief Mentor, Indus School of Technical Analysis Financial Journalist, Technical Analyst, Trainer, Family Fund Manager