Intra day opportunities elusive on Nifty

The bulls continued to maintain the grip on the market. With a smaller movement, they keep the market to go up and up. The benchmark indices are hitting the new lifetime highs almost every day. The Nifty gained 58 points and closed at 13,740.70. The overall market and Nifty breadth are negative and in favour of declines.

A majority of the sectoral indices closed with a negative bias. Interestingly, almost all sectoral indices closed with half a per cent gain or loss. PSU banks continued to decline for the second day. Technically, the Nifty formed an evening star or a spinning top candle on 100 points intraday volatility. It closed higher at another new lifetime high on negative index breadth. Once again, HDFC twins saved the index from a negative close. Just 15 stocks of the Nifty 50 stocks closed with 0.4 to 2.88 per cent gains, even then it closed with 58 points gain. The short and long term moving average trending up and there no indication of any kind of weakness.

As mentioned yesterday, the intraday traders are not getting the opportunities to trade and positional traders with the help of trialling stop-loss participating in the rally. Now the support zone inched up to 13,548-13,624. Unless this zone support breaks with added distribution day, we cannot be bearish, though it is forming small body candles at the top. The MACD histogram better than yesterday shows some signs of a pickup in momentum. But, the serious negative divergence still persists. The RSI reached to over 80 zone, which is an extreme overbought condition. The MACD line absolutely flattened. On a shorter period chart, the MACD line is about to move below the signal line, which is bearish.

The Nifty trading very long-distance forming the long-term average and the 20 DMA, hence we can expect some consolidation. But, there is no sign of weakness, we have to be with the trend on a trialling basis.

Either the Nifty must close below the previous day low or below the short averages mentioned above. Intraday opportunities are elusive for the past few days. Whoever having the long positions, continue by trialling the stop loss level.

(The writer is a financial journalist, technical analyst, trainer, family fund manager)