Any further spurt in VIX will hurt bullish bias
Daily MACD line is closed very near to the zero line; The Bollinger bands further narrowed; On the upside, the index must close above 19,623 for a positive bias
image for illustrative purpose
Nifty Forms Open High Candle
♦ Recovery is limited to less than 50% of first hour’s bar
♦ 123 stocks hit a new 52-week high
♦ 95 stocks traded in the upper circuit
♦ 20DMA resistance is at 19,774 pts
♦ It’ll act as a strong resistance for now
The market opened on a flat note, but within five minutes, the benchmark indices sharply down. NSE Nifty declined by 109.55 points or 0.56 per cent and closed at 19528.75. The PSU Bank index is the top gainer with 2.38 per cent followed by the Media index with one per cent. The Realty, Mid-cap, Small-cap and the Nifty Next-50 closed with moderate gains. The Nifty Auto and Energy indices were the top losers with 1.20 per cent. All other indices closed with negative bias. About 123 stocks hit a new 52-week high, and 95 stocks traded in the upper circuit. HDFC Bank, JSW Infra, and Axis Bank were the top trading counters on Tuesday in terms of value.
The Nifty has formed an open high candle. It declined below last Thursday’s low and bounced. However, the recovery is limited to less than 50 per cent of the first hour’s bar. After the first hour, The Index traded in less than a hundred points range. Now, it is decisive below the 50DMA, and this important moving average is in a downtrend.
After a long weekend, the markets traded lower and struggled to hold the 19,500 support for the day. The Index breadth is negative. Looking at the price action, the 19,500 level is like a make-or-break level now. In any case, in the next two days, close below this crucial support, the Nifty can test 19,230 points, which is a prior low.
The RSI positive divergence on the hourly chart did not work as expected. It was flattened after the first hour. The daily MACD line is closed very near to the zero line. The Bollinger bands further narrowed. On the upside, the index must close above 19,623 for a positive bias. The 20DMA resistance is at 19,774 points, which will act as a strong resistance for now. The India VIX, up by 2.93 per cent, is a fresh caution for the bulls. Any further spurt in VIX will hurt the bullish bias.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
