Nifty forms higher top and higher bottom candles

The geopolitical tensions dented the market sentiment and led to profit booking at higher levels. NSE Nifty ended flat with 6.25 points gain at 18,409.65. The Nifty Metal, Media, and Realty sector indices dragged the market with one per cent to 1.94 per cent declines. No sector index has gained over half a per cent. The Bank Nifty and Fin Nifty are the top gainers with 0.38 per cent and 0.34 per cent. All other sectoral indices made insignificant moves. The broader market and Nifty breadth were negative, as 1,210 declined and 680 advanced. Out of Nifty 50 stocks, 30 stocks closed negatively. About 58 stocks hit a new 52-week high, and 67 stocks traded in the lower circuit. Medanta closed with a 24.2 per cent gain on its listing. HAL, Kotak Bank and Adani Enterprises were the top trading counters on Wednesday in terms of value.

The domestic equities closed on a flat note. The benchmark indices traded volatile as the buyers and sellers fought for direction. The Nifty has formed a Doji candle. It has not given any kind of weakness signs as it also formed a higher top and higher bottom candle. There were signs of profit booking at regular intervals during the session. The open interest declined, and the volumes recorded higher. There is no major technical development evident on Wednesday. The only positive factor is that the Nifty has made another high, but not on closing basis. The indecisive moves are good for directional trades. On the lower time frame chart, it is clearly evident that the momentum has been lost in the market. The seven week-long uptrend has to halt somewhere before reaching new highs. The price never moves in a straight-line fashion. It has formed staircase kind of higher tops and higher bottoms. Though the current price action has not given any clue about the weakness, there are signs of exhaustion. The volume and volatility expansion is the first sign of probable reversal. It is wise to be in less leveraged positions and on the sidelines.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)