Nifty shows bearish implication
Auto, Infra, Media, and Infra indices were up by half a per cent
image for illustrative purpose
The market snapped a four-day winning streak and closed below the critical resistance zone of 14880. The Nifty lost 91.60 points and ended at 14850.75. Energy and PSU Bank indices up by 1.76 per cent and 1.12 per cent, respectively. Nifty Auto, Infra, Media, and Infra indices were up by half a per cent. The Bank nifty down by 0.82 per cent. India VIX is also down by 1.95 per cent. The broader market breadth is positive as 1159 advances and 766 declines. Out of 50 Nifty stocks, 28 ended in negative territory. 201 stocks hit a new 52 week high, and 198 stock hit the upper circuit today.
As we suspected, the spinning top got the confirmation for a bearish reversal from swing high. The conviction on the uptrend is lacking. The Nifty once again closed below the 14880 zone and registered a failed breakout. Monday's candlestick has hinted about the topping formation. The Nifty opened with a gap down and closed below yesterday's low. This is the confirmation of the bearish implication of an evening star candle. We keep advocating about the indecisive market direction, and it will take more time to consolidate. The 14880-15044 zone of resistance has become a herculean task to cross. Even it broke out of a slopping channel and closed above the 14880, it formed a bearish bar and got confirmation with a higher selling volume.
The derivative market indicates that the short positions were built in the market. The market mood indicator, PCR, is at 1.7, which is in an extreme overbought condition. In recent history, whenever it crosses 1.7, the index fell sharply. Today's Nifty future's volume also higher than the previous two days. The histogram on a lower time frame of 75 minutes shows an increased bearish momentum. The RSI on a daily chart once again turned down after facing resistance at 58 levels. As Thursday is a holiday, the weekly derivative closing today may increase the volatility.
