Nifty falls below lower Bollinger band
By closing below the previous week’s low, the index confirmed the bearish Engulfing implications
Mkt Breadth Turns Extremely Negative
- Volatility index up by 7.61%
- 2,106 declines
- 504 advance
- 154 stocks in lower circuit
- 216 stocks hit a new 52-wk high
The equities registered another sharp decline with massive selling pressure. NSE Nifty declined by 333 points or 1.54 per cent. Only the Nifty Pharma index is able to close positively by 1.66 per cent. The Media index was the top loser with 12.87 per cent, as the ZEEL collapsed by over 30 per cent. The Realty, PSE, and PSU Bank indices are down by 4.10 per cent to 5.31 per cent. All other indices are down by 0.48 per cent to 3.47 per cent. The volatility index is up by 7.61 per cent to 14.85. The breadth is extremely negative as 2,106 declines and just 504 advances. As many as 154 stocks traded in the lower circuit, and About 216 stocks hit a new 52-week high. HDFC Bank, ICICI Bank, IRFC, and ZEEL were the top trading counters today in terms of value.
The Nifty collapsed below the previous week’s low. It registered an intraday decline of over 557 points, which is the highest single-day fall after December 20. Soon after the positive gap opening, the selling pressure across the board pulled down the market. The PSU stocks were the worst hit today. All the railway stocks were the top trading counters today and succumbed to the losses. By closing below the previous week's low, the index has confirmed the bearish engulfing’s implications.
For the day, it took support on a 10-week average. The Nifty declined below the lower Bollinger band. It also added the distribution day as the volume was higher on a 1.54 per cent decline day. Now, the Nifty is decisively closed below the 23.6 per cent retracement level of the prior upswing. The next supports are at 20,976 and 20,868 points. Below this support zone, the index may test the prior breakout level of 20,222 points. As the index sharply declines, it may experience a pullback, and try to retest the 21,500 points. The expiry is just two days away, and the long weekend may force the short covering. The Rollovers will play a major role in directional bias.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
