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Mkt momentum clearly waning

image for illustrative purpose

Mkt momentum clearly waning
X

24 May 2021 11:22 PM IST

The benchmark indices closed flat on profit booking at higher levels. The Nifty opened higher with a gap up but did not sustain above the opening levels. It closed at 15197.70 with a 22.4 points gain. Nifty futures declined by 16.20 points and closed with a discount three days before the expiry. The Bank nifty continued to be in positive territory but witnessed huge volatility at the end of the day. FMCG, Metal indices closed with half a per cent losses. Many of the sectoral indices were ended up with modest gains. The index breadth is 1:1, and the broader market breadth is positive as 1189 advances and 760 declines. 182 stocks hit the new 52 weeks high and 183 stocks in the upper circuit.

The Markets continued their positive bias with a cautious approach, as the derivative expiry is nearing. The Nifty moved in a little over 100 points range. The Nifty closed above the previous day high also shows positive strength in the market. It formed an indecisive long-legged small body candle, which is almost at a swing high is also a caution. Apart from this, on a 75-minute chart, the leading indicator RSI showing the negative divergence.

Interestingly, the Nifty moved in the first-hour range and not given an intraday trading opportunity. In all terms, today's price action did not meet the follow-through day. A sharper move needs confirmation with a strong follow-through day. It may be closed higher, above the prior bar high, the positive strength's conviction is missing. In any case, the benchmark index fails to close above the 15255-15276 zone, and it will be difficult to sustain the rally. The daily volatility may increase as expiry trades and rollovers. The derivative and cash volumes declined once again. The momentum is clearly waning. Trading with trailing stop loss for the existing positions is the only way to protect the profits on the table. At the same, there is no bearish signal for now. Only below the 15145, markets may give the weaker signal.

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

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