Market Live Updates
Dalal Street closed on a flat note on the last day of 2020. The Nifty closed with just a quarter point loss and ended at 13,981.75. All the sectoral indices were also ended with less than a per cent gain or loss. The December series ended with melting option premiums across the board, and the option seller made money today.
The Reality sector was the top gainer with 1.23 per cent. Pharma and Metal indices were up by 0.7 per cent. FMCG and Infra indices declined by half a per cent. The VIX registered a flat close. Overall market breadth is positive and in favour of advances.
After meeting our yesterday's target, it oscillated within a small trading range. After trading in 112 points range, it closed very flat and formed a Doji candle again. Two consecutive Doji candles at a near parallel high is not at all good sign for the bulls.
This is the maximum level of indecision for both sides. Even on 17th and 18th December also the Nifty formed a similar pattern. After these two Doji days, the Market witnessed manic Monday. Let us watch for the very recent history will repeat or not.
As the indicators in overbought condition and the market is trading in a very narrow range, the traders should apply prudent risk management to protect the gains. Any flash crash like 21st December may hurt everyone. The Market has limited upside potential from now. There is a higher probability of getting into a counter-trend consolidation in the new year.
Though the market is in an overbought condition, the momentum indicator has not given any kind of sell signals. So, It is better to wait and watch for clarity on the direction. The support zone moved higher to 13890-936. A close below the 13936 is an early sign of weakness.
(The author is a financial journalist, technical analyst, trainer and family fund manager)