VIX at lowest levels, move with a neutral to negative stance
The Nifty has formed another hanging man candle. It closed below 20DMA. VIX is at the lowest level since Dec 2022
The benchmark indices are directionless for the second week. The Nifty and the broader market indices closed very flat. The Nifty closed at 17856.50 with 36.95 points or 0.21 per cent decline. The Metal index is the top loser with 1.82 per cent. The Nifty Realty is up by 1.36 decline. The Banknifty and FinNifty closed almost flat. The Nifty Pharma, Auto, and Media indices closed with less than half a per cent decline. The India VIX declined to 12.74 lowest this year. The broader market breadth is 1:1 as 980 advances and 941 declines. About 75 stocks hit a new 52-week high, and 66 stocks traded in the upper circuit. PayTM, Adani Enterprises, and Reliance were the top trading counters today in terms of value.
Another week of sideways gone. It formed another inside bar as it traded just in the range of the previous day. The last seven days' price action is limited to the budget day range. The previous day's dragonfly doji did not get any trend change implications. The Nifty has formed another hanging man candle. It closed below 20DMA. The indecisiveness is not limited to the benchmark indices. The broader market and all the sector indices were very flat. The index breadth and the broader market breadth are not at all encouraging.
The benchmark indices are trading with higher volatility, but the VIX is at the lowest level since December 2022. This is very strong negative for the market. The VIX and Nifty have an inverse relationship. When VIX is at the lowest level, the Nifty will form a swing high. If the Nifty fails to close above the budget high of 17972, it may resume the downtrend next week. As long as it trades below this crucial, it is advised to avoid long positions. On the downside, 17774 is going to be a crucial support on Monday. Below this level, it will resume the downtrend in a faster manner. Be with a neutral to negative stance on the marker for now. Wait for a decisive move for a directional trade.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
