All charts point to bearish phase

The positive opening was not helpful for the market to recover from losses. The NSE Nifty registered the seventh successive negative closing. It declined by 40.50 points or 0.24 per cent. The Pharma and Media indices were the top gainers with 1.33 per cent and 1.2 per cent. The FMCG, Realty, Metal and Infra indices closed with half a per cent gains. The IT and the Energy indices were down by 0.92 per cent and 0.83 per cent, respectively. The other sectoral indices declined by less than half per cent. The VIX is down by 3.59 per cent. The Market breadth is positive as 1037 advances and 846 declines. About 50 stocks hit a fresh 52-week low, and 106 stocks traded in the upper circuit. Adani Enterprises, Reliance and Shree Cements were the top trading counters on Thursday in terms of value.

The market experienced one of the worst weeks due to global recession fears and a series of rate hikes by various central banks. In the last five trading sessions, the Nifty declined by 829 points or 4.71 per cent. All the intraday pullbacks were sold into. The Nifty is now 0.78 per cent below the 200DMA. It also declined below the crucial Anchored VWAP support. Now the 50DMA entered a downtrend. The fresh week opened with a big gap down and sustained below the gap area. Three consecutive strong weekly bearish candles show that the market is under a complete bear grip.

The weekly RSI also declined below the 50 zone. The daily moving average ribbon is in a downtrend along with the MACD line below the zero line, which is negative for the market. With the six distribution day count and trading below the long and short-term averages means, the market is in a confirmed downtrend. After the Double Top pattern breakdown with a distribution day, it retested the breakdown level and declined sharply lower. Yesterday's Doji candle failed to get positive confirmations. Though the Nifty opened with a positive gap, it ended up with a strong bearish bar. The 200DMA acted as a strong resistance for the second successive day. Now, every technical parameter and setup is showing the bearish phase. Any bounce has to sustain above the gap area or the 50DMA of 17309 for a bullish reversal. The Nifty has to close above the previous day's high for a short-term bounce. Today is a weekly close, a monthly and also a quarterly close. Let's wait and see the structure at the weekend close.

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