Stay away from building new positions
The hourly RSI and MACD are now in the bearish zone
Lack of Triggers
- India VIX is up for 3rd straight day to above 12
- It indicates more pain in the market
- If India VIX closes above 13, expect more impulsive downside moves
- 59 stocks hit new 52-week high
- 100 stocks traded in the upper circuit
The benchmark indices closed negatively for the second straight day. NSE Nifty declined by 90.45 points or 0.47 per cent and closed at 18,989.15 points. The Nifty Realty index is the top gainer with 1.55 per cent, followed by the Media index with 0.88 per cent. The Pharma, Oil and Gas indices closed with modest gains. The Nifty Metal index is the top loser with 1.43 per cent. All other indices declined by less than a percentage point. The India VIX is up by 1.88 per cent and settled at 12.05. About 59 stocks hit a new 52-week high, and 100 stocks traded in the upper circuit. HDFC Bank, Idea, and Reliance were the top trading counters today in terms of value.
The Nifty closed much below the previous day’s low and confirmed the end of the counter-trend. It closed on the sloping channel support again. The index opened with a flat to negative note and did not get the buying support. It closed near the day’s low. As the selling pressure, the Nifty failed to move above the prior bar high on an hourly chart. The hourly RSI and MACD are now in the bearish zone. The nearest support is now at 18,951 points, which is 150DMA.
If it breaks down for the second time in six days, it means it has broken down another crucial support. Today’s volumes were slightly lower than the previous day. As the index closed below the psychological 19,000 level, it is important to close at least above the previous day’s high to contain the further fall.
The 5EMA of 19,081 points will act as the immediate resistance. The India VIX is up for the third straight day to above 12, which indicates more pain in the market. As mentioned earlier, a prolonged low VIX regime is not for the market. If the India VIX closes above 13, expect more impulsive downside moves in the broader market. Certainly, it is not a time to bargain hunting in the market. Stay away from building new positions, as no sector is in a position to lead the market.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
