Nifty forms indecisive candle

Market is expecting some aggressive measures in the budget. That could be a trigger for the market on either side. The 24m375 level is the strongest support and a close below 24,522, the Doji candle will give the confirmation for its bearish implications and will give early signals for the weakens. On the upside, a positive close is enough to continue the current rally

Positive Market Breadth :

•  1,499 advances
•  1,254 declines
•  India VIX up by 3.37%
•  115 stocks in upper circuit
•  181 stocks hit a new 52-wk high

The equities rallied further to the new highs as NSE Nifty gained by 84.55 points or 0.35 per cent to close at 24,586.70 points. Only Nifty IT index was the loser with 0.26 per cent. The PSU Bank is the top gainer with 3.07 per cent. Oil and Gas, CPSE up by 1.52 per cent and 1.99 per cent, respectively. Realty, Healthcare, PSE, Pharma, Auto and Energy indices advanced by over one per cent. All other indices ended with moderate gains. The India VIX is up by 3.37 per cent. The market breadth is positive as 1,499 advances and 1,254 declines. About 181 stocks hit a new 52-week high, and 115 stocks traded in the upper circuit. IRFC, IREDA, HDFC Bank, and SBI are the top trading counters on Monday in terms of value.

The benchmark index Nifty hit another new lifetime high. The index has formed an indecisive candle, a perfect Doji candle. It is a clear exhaustion sign. The volumes are still a concern for this aggressive uptrend. Since June 28, volumes have been recorded below the average. The index opened at the previous session’s high and closed at the opening level.

The PSE and CPSU stocks - SBI, ONGC, NTPC, and ITC led the rally. The previous Doji candle on 3rd July failed to get the confirmation for its bearish implications. Monday’s Doji candle is the third one in the last nine days. The current impulse rally has to undergo a counter-trend consolidation. As the budget is scheduled for next week, we may see some consolidation post-budget. The Market is expecting some aggressive measures in the budget. That could be a trigger for the market on either side. The 8EMA at 24,375 points is the strongest support. A close below 24,522 level, Monday’s low, the Doji candle will get the confirmation for its bearish implications and will give early signals for the weakens. On the upside, a positive close is enough to continue the current rally. For short-term trades, the 24,577 points is the strict stop loss. Maintain risk management without hesitation.

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