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Range-bound trading ahead of RBI meet

Nifty declined below rising trendline support drawn on Oct 13 and declined below the breakout level

Range-bound trading ahead of RBI meet

Range-bound trading ahead of RBI meet

A sharp surge in USD-INR and a spike in the Dollar index have dented the sentiments in the domestic market. NSE Nifty was down by 58.30 points or 0.31 per cent and settled at 18,642.75 points. PSU Bank index was the top gainer with 1.26 per cent. The Nifty FMCG and the Energy indices were gained by 0.33 per cent. The Nifty IT and the Media indices were the top losers, with 1.45 per cent and 1.02 per cent, respectively. The other indices were down by 0.50 per cent. The Volatility index India VIX is up by 2.26 per cent. The market breadth is negative as 1196 declines and 724 advances. About 69 stocks hit a new 52-week high, and 117 stocks traded in the upper circuit. ICICI Bank, PNB and Adani Enterprises were the top trading counters today in terms of value.

The domestic equities witnessed another volatile session. Even though, positive exit poll survey results were not eventful for the market. The Nifty opened with a negative gap and traded within the first-hour trading zone till the late session. With the spike at 3pm, the losses were minimised. RBI's monetary policy meeting scheduled on Wednesday also influenced the market movements.

Apart from the policy, the commentary on Rupee depreciation will also play a crucial role in market direction. During the day, the Nifty declined below the rising trendline support drawn on October 13 and declined below the breakout level. It also closed below the 5EMA after two days of testing. The RSI declined below the channel support line on a daily chart. As mentioned in the weekly commentary, the market is turning weaker in the shorter period of time frame. The moving average ribbon has flattened on an hourly chart. For tomorrow also market may trade flat till the RBI policy announcement. Before the policy, we may not get the trade ideas. Wait for 10.15 am bar to close on 15 minutes chart, and take a decision on the directional trade. Until then, it is better to avoid taking positions. We can expect a major technical development at the end of the day.

T Brahmachary
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