Charts indicating indecisiveness
After a dark Cloud Cover candle, Nifty forms inside bar; Hourly MACD is completely flat and shows lagging momentum
The new year started on a positive note. NSE Nifty closed higher by 92.15 points or 0.51 per cent and ended at 18197.45 points. NSE Nifty Metal index is the top gainer with 2.43 per cent. The Nifty Media and Realty indices gained by 1.17 per cent and one per cent, respectively. Only Nifty Pharma was down by 0.37 per cent. All other sector indices gained by less than a percentage points. The market breadth is positive as 1,309 advances and 643 declines. About 56 stocks hit a new 52-week high, and 112 stocks traded in the upper circuit. Tata Steel, Yes Bank, and Sail were the top trading counters today in terms of value.
NSE Nifty closed higher and formed an inside bar. After trading in 130 points range, it closed above the 8EMA. Other than this there is no major technical development occurred today. As the index formed an inside bar, the previous day's high and low were the key resistance and support for tomorrow also. As stated earlier, the 50DMA (18274) is the major hurdle for now. The 18080 level is still a good support. Only in the case of this range breakout, we can see some directional move. For the last two days, 18080 level has been acting as support.
After a dark Cloud Cover candle, Monday's inside bar is showing indecisiveness. If the Nifty fails to close above the 18265-275 zone, we assume that Friday's high is the short-term high. Today the index traded mostly in Friday's last hourly bar range. The hourly MACD is completely flat and shows lagging momentum. The daily RSI is still below the 50 zone. Let us wait for a convincing move for a directional trade. Stock-specific activity will continue, and the Metal sector is looking good as it improved momentum and relative strength.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)