Stay away from long positions
Nifty stuck between Anchored VWAP support and resistance; The last hour of selling pressure shows traders’ risk averseness in carrying forwarding the positions
Markets showing volatility at the highs
What’s Up
♦ 174 stocks touched 52-week high
♦ 137 stocks traded in the upper circuit
♦ India VIX is up by 4.26%
♦ MACD has been flat for last 3 sessions
The equities were indecisive to move either side direction. NSE Nifty closed with a 19.30 point decline at 19,731.75 points. None of the sectoral indices gained or lost by over one per cent. The Nifty Metal index is the top gainer with 0.91 per cent, followed by CPSE and PSU bank indices with 0.74 per cent and 0.72 per cent, respectively. On the flip side, the Nifty Pharma index is down by 0.46 per cent, and FMCG declined by 0.23 per cent. All other indices closed with modest losses or gains. The Volatility index, VIX is up by 4.26 per cent. About 174 stocks touched a new 52-week high, and 137 stocks traded in the upper circuit. GSFC, MMTC, and ITI were among the top trading counters today in terms of value.
The Nifty again moved in the range and formed an inside bar. It oscillated around the 20DMA and closed below. The volumes were much lower in the last five days. The index has formed a more indecisive candle on a lower time frame chart. Even on the daily chart, the Nifty has formed a small body candle with long shadows. The momentum is down on all time frames. The index stuck between the Anchored VWAP support and resistance. The last hour of selling pressure shows the traders’ risk averseness in carrying forwarding the positions. As the inside bar formed, the Nifty must close either side of the Friday’s level. This means a close above 19,805 points will be positive, and below 19,635 is negative.
The Nifty has formed two lower-high candles. As mentioned earlier, Thursday’s high, 19843, is now the short-term swing high for all practical purposes. Only above this level the market will test the near all-time highs. The declining RSI shows a decline in momentum. The MACD has been flattened for the last three days. On the downside, a close below 19,635 points, the 50DMA support is at 19,611 points. Below this 19611-35 support, the Nifty can test the previous low. Overall, the price structure is damaged. Stay away from the long positions, be with a neutral to a bearish bias.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
