Nifty forms bearish Dark Cloud candle
Watch the 22,313-22,480 zone on Monday; Expect more volatile days ahead; Index formed an open-high candle and closed very near the to the day’s low
Benchmark index failed to register a high close on a weekly basis. The index took support at 8EMA and 20DMA for the day. It also formed lower highs and lower lows
The banks and financials spoiled the previous day’s rally. With the margin pressure and poor earnings, the Bajaj twins declined sharply. NSE Nifty was down by 150.40 points or 0.67 per cent and closed at 22,419.95 points. The Nifty Consumer Durable and Media indices gained by 1.72 per cent and 1.18 per cent, respectively. The Pharma and Realty indices are up by 0.62 per cent and 0. 0.59 per cent. FinNifty was down by 0.89 per cent, and Bank Nifty declined by 0.61 per cent. All other sector indices declined or advanced by less than half per cent. The market breadth is slightly positive as 1,338 advanced and 1,262 declined. About 137 stocks hit a new 52-week high, and 119 stocks traded in the upper circuit. IDEA, Bajaj Finance, Kotak Bank, and TechM were the top trading counters on Friday in terms of value.
The Nifty has erased all the gains of the previous session. It again formed an open-high candle, and closed very near the to the day’s low. It formed a Dark Cloud candle, which is bearish. The Bank Nifty also formed a similar candle, as the banks and financials were weakened. The Nifty declined by 234.85 points from the day’s high. If excluded, the previous day’s volume is because of derivatives expiry, Friday’s volume is higher in the last four days.
On a weekly chart, it formed a long-legged and small-body candle and failed to register a high close on a weekly basis. The index took support at 8EMA and 20DMA for the day. The MACD line failed to close above the signal line for a bullish bias. The RSI is back below the 55 zone. On an hourly chart, the index closed in the moving average ribbon, and the MACD has given a bearish signal again. It also formed lower highs and lower lows. The VIX is up by over two per cent for the second successive day. On an intraday basis, the Nifty declined below 22,400 points, but with the last 15-minute adjustments, it was able to close just above the 20DMA. Watch the 22,313-22,480 zone on Monday. Expect more volatile days ahead.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
