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Charts indicate bearish bias

Charts indicate bearish bias
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Charts indicate bearish bias 

The stock market closed flat after opening with a big gap down. Metals, FMCG led the market recovery. The Nifty closed at 14634.15 with just 3.05 points gain. The Bank Nifty lost 0.96 per cent. The Nifty Metal index up by 2.16 per cent, and FMCG advanced by 1.1 per cent. The Smallcap-100 index up by 1.09 per cent. Overall, market breadth is negative as 1,177 advances and 736 declines. As the volatility increased, the India VIX up by 2.89 per cent and closed at 23.6925. About 150 stocks hit new 52 weeks high, and 62 stocks hit a new lifetime high.

As expected, the Nifty tested the 14,469 points, surprisingly at the opening itself. Later, it recovered all the initial losses and closed near to the day's high. Even after recovery of over 215 points from the day's low, the momentum has not built up. As the small-cap stocks outperformed the broader market, the heavy stocks and the Nifty have not shown the momentum much. At the opening, the Nifty breached the 21EMA and 100DMAs.

Finally, it closed above these averages. Price wise, the index is not made higher high. At the same time, it has not retraced a minimum level to show bullish strength. Even on the hourly chart, the MACD histogram is still in the negative zone. The negative directional indicator -DMI moved further, and the positive directional indicator +DMI declined on a daily chart. This shows that the lack of conviction in today's move. The Nifty futures volumes are lower than the previous day. On Tuesday, the Nifty may face resistance at 14,730 points. Before that, it has to sustain above 14,656 level. On the downside, In any case, it falls below 14,575 level is negative for the market direction.

— The writer is a financial journalist, technical analyst, and family fund manager

T Brahmachary
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