MACD indicates a fresh bearish signal
RSI declined below 50 zone, resulting in a failed breakout; After 2 hours of trading, Nifty declined sharply and formed a lower-high candle
The market declined again on the weekly expiry day with higher volatility. NSE Nifty declined by 57.50 points or 0.32 per cent and settled at 18197.85. It erased most of its previous gains. The Nifty CPSE, PSE and IT index gained a little over 0.50 per cent. The Media index is a top loser with one per cent. A majority of the other indices declined by less than half a per cent. The market breadth is negative as 1163 declines and 743 advances. About 43 stocks closed at a 52-week low, and 67 stocks traded in the upper circuit. Reliance, Adani Enterprises, and IndusInd Bank were the top trading counters today in terms of value.
On a weekly expiry day, the Nifty traded with high volatility and formed an inside bar. With today's price action, the Nifty has formed a long-legged Doji candle. The 20DMA is flattened, and the index is still above it. The volume data and the market breadth are not encouraging. Breadth turned negative again, and the volumes were lower. The Nifty closed again at a crucial support of 18100, which is the prior high, and the recent swing high. Yesterday's base breakout did not attract the follow-through day.
The RSI declined below the 50 zone, resulting in a failed breakout. After two hours of trading, the Nifty declined sharply and formed a lower-high candle, closing near the day's low. It has formed a series of the bearish candles. On a lower time frame chart, the MACD has given a fresh bearish signal. It took support at 20 periods on average for the last two hours. Only PSU Bank, CPSE, and PSE indices were able to close with tiny gains. Interestingly, the declines were limited to less than a percentage in all other sectoral indices.
With indecision persisting, the market may trade in the zone or sideline till the Union Budget. As mentioned earlier, the pre-budget months are positive to neutral. For now, the market range may continue between 17774-18265. For the last four weeks, the index is not able to break this zone. With the current technical evidence, Apply neutral to volatile strategies till the month's end.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
