Nifty Remains Range-Bound With No Clear Breakout
Stay neutral until a clear directional breakout occurs. Any major escalation in conflicts, particularly involving strategic weaponry, could significantly impact sentiments globally
Nifty Remains Range-Bound With No Clear Breakout
The equities were nervous as news flow dominated about geopolitical risks. The Nifty declined by 34.10 points or 0.14 per cent and closed at 24716.60. The Realty and PSU Bank indices were the top gainers with 2.31 per cent and 2.15 per cent, respectively. The Small-cap index is up by 1.19 per cent. The FMCG, Midcap, and Consumption indices gained over half a per cent. The Nifty IT and Metal indices declined 0.70 per cent each. The India VIX is up by 6.72 per cent to 17.15. The market breadth is positive as 1529 advances and 1402 declines. About 68 stocks hit a new 52-week high, and 109 stocks traded in the upper circuit. CDSL, BSE, RPower, SBI, and NivaBupa were the top trading counters in terms of value.
On a highly volatile day, the Nifty is able to close flat and above key support, the 20 DMA. It declined by 155 points in the first hour of trading and gradually recovered. The volumes were much lower. The index has recovered 228 points from the day’s low. The index has formed a lower low and lower high candle. As mentioned earlier, the 24462 is the crucial support and valley point of the double-top pattern. The 20 DMA is at 24706, acting as support for now. Any violation of this support will lead to a bigger fall. It may fill the 12th May gap and test the 50 DMA of 24004. The RSI further declined to the 55 zone. MACD shows an increase in the bearish momentum. There is no change in the directional bias, as the index is still in the range. The banks, PSU Banks in particular, outperform the market. Mid- and Small-Cap stocks are also improving their relative strength, outperforming the benchmark index. For now, it is better to stay neutral as long as it trades in the range. Either side breakout will give opportunities to trade.
The geopolitical tensions, as the escalating Russia-Ukraine war, are being watched very closely by markets. Any use of weapons of mass destruction will impact the markets adversely across the world.
(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)
