Nifty to trade in narrow range for next days
Nifty struggled to move higher but closed at flat. It witnessed a sharp decline of 80 points in just 10 minutes around 2 pm
image for illustrative purpose
After hitting the new lifetime highs for three consecutive days, the Nifty traded subdued and closed slightly negative. It just lost 7.95 points and closed at 15574.85. Sectoral indices also performed very narrow range. The Energy and Media indies up by 0.32 per cent each. The Bank nifty lost 0.53 per cent and the Metal index down by 0.78 per cent are the laggards today. The India VIX gained by 2.98 per cent and settled at 17.39. The overall market breadth is negative as 1197 declines and 721 advances.
The Nifty struggled to move higher but closed at flat. It witnessed a sharp decline of 80 points in just 10 minutes around 2 pm. Apart from this, the index traded in sideways. After opening with a positive gap, later it filled the gap and closed below the previous day's high. As it closed below the opening price, it formed a bearish bar. The Nifty looks tired after a 1244 point rally in 20 trading sessions. There are insignificant downswings in this phenomenal rally. Still, there are no bearish signs on the chart. On a 75 minutes chart, the histogram turned negative as the momentum lost its strength. The RSI also turned down from the overbought conditions. On the same chart, the Nifty did not make any lower swing. But, there is no change in the daily charts. No negative divergences are visible.
The Nifty retraced 127.6 per cent (15600) and faced resistance. With this important technical evidence, Today' high 15660 will be critical for bulls. Only above this level, the Nifty will continue the rally. Otherwise, it enters into a counter-trend consolidation. But, only a dip below 15300 will be negative. We can take out partial profits at current levels. Most probability is that the Nifty trades in a very narrow range for the next two to three days. For this week, 15300-600 will be an important zone for the market. Above 15660, it will resume the rally, and below 15300 it further extends the counter-trend toward 15180. Now we can be neither bullish nor bearish. Be with a neutral stance until the support or resistances to be cleared. Interestingly, the Nifty future formed a Doji candle.
(The author is financial journalist, technical analyst, family fund manager)
