Market lying low, eludes any direction

The stock market was hesitant to move on either side during the week as triggers were missing. The Nifty and the Banknifty formed doji candles on weekly charts. The Nifty settled by 10 points loss at 15,630.30. Banking and Financial stocks protected the market from a major decline. The Bank Nifty and FinNifty were up by 1 per cent, 0.86 per cent respectively. Metal and FMCG indices down by 1.5 per cent each. Nifty Pharma, Energy, Consumption and Media indices declined by one per cent each. India VIX cooled off by 4.35 per cent and closed at 22.04. The market breadth was negative as 1,029 declines, and 847 advances were recorded and 353 stocks closed unchanged.

The market failed to continue yesterday's momentum. During the last week, mostly traded in just 280 points. The previous week's historical move of 1,289 points notwithstanding, it formed a small body candle. Thought market is not giving any weakness confirmations, and the momentum has definitely waned.

The Nifty formed a doji candle on the weekend, shows that the traders are not interested in taking either side of the positions. Three days of negative closing and two days of positive closings during the last week hardly gave any trading opportunities. After 6,000 points rise, the leading sector index Banknifty also formed a perfect doji on the weekly time frame.

The market breadth was mostly negative during the day. The focus has shifted to small and micro-cap stock. The Small-cap index was outperformed by the benchmark index. As the volatility declined, the option premiums melted like ice during the week. As the market is not giving any clues about the future direction, it is better to wait for a decisive breakout on either side. The current week's high and low of 15,257 – 14,977 will act as resistance and support for the next week. Either side breakout will give a very sharp move. Otherwise, avoid trading in the index and focus on stock-specific activity.

(The author is a financial journalist, technical analyst, trainer, family fund manager)