Nifty’s last inside bar still valid
Because of the sideways trading, there is no change in the indicators set up; MACD line and RSI were flattened; 19,303-19,523 will act as a support and resistance zone
image for illustrative purpose
The benchmark indices were closed positively because of the rally in Reliance and metal stocks. The NSE Nifty gained 24.10 points or 0.12 per cent and closed at 19,355.90pts. The Metal index is the top gainer with 1.69 per cent. Energy, Infra, Oil & Gas indices were also up by more than 0.61 per cent. The Nifty IT index is the top loser with 1.24 per cent. FMCG, Auto, and PSU Bank indices declined by over 0.5 per cent. The market breadth is negative as the advance-decline ratio is at 0.68. About 129 stocks hit a new 52-week high, and 74 stocks were traded in the lower circuit. Reliance, HDFC Twins, and Olectra Greentech were the top trading counters on Monday in terms of value.
The Nifty has traded in a 108 points tight range and formed an inside bar on charts. It is still below Thursday’s low. Though the index closed in positive territory, the index breadth and broader market breadth are negative. On Monday, Reliance has contributed 79.59 points to the index. Otherwise, the Nifty would have been deep in the red, as 33 of the Nifty-50 stocks closed with losses. Because of the sideways, there is no change in the indicators set up. The MACD line and RSI were flattened. As the inside bar is still valid, the 19,303-19,523 zone will act as a support and resistance. After the first hour, the index made lower highs. The hourly RSI is still in the neutral zone. It closed in the hourly moving average ribbon. The Bank Nifty has filled last Monday’s gap on Monday and formed another lower high along with lower low candle.
For today, Nifty has to protect the 19,303 support. A decline below this, the 8EMA support is at 19,271pts. If the index declines even below this, it will fill last Monday’s gap, where the support is at 19,201pts. On the upside, the Nifty has to move above Monday’s high of 19,436pts. The volatility may spike from now, and stay cautious.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
