Avoid Long Positions In Non-Directional Bias

Nifty rose 1,843 pts (8.46%) in 2024, forming a shooting star candle, which was replicated on the half-yearly chart as well. Despite closing below previous quarter’s low, it marked a ninth consecutive positive year, supported by strong domestic inflows which countered FII selling

After a volatile trading, NSE Nifty closed flat at the previous day close. It closed at 23,644.80 points, down by just 0.10 points. The PSUs led the market recovery from the opening lows. The CPSE and PSE indices were the top gainers, with 1.58 per cent, and 1.25 per cent, respectively. The Oil and Gas and Energy indices gained over one per cent. The Pharma, PSU Bank, and FinNifty gained by over 0.50 per cent. The Nifty IT index is the top loser with 1.44 per cent. The Services index is down by 0.53 per cent. The India VIX is up by 3.40 per cent to 14.44. The market breadth is positive as 1779 advances and 1,050 declines. About 90 stocks hit a new 52-week low, and 85 stocks traded in the lower circuit. ITI, RITES, HDFC Bank, Unimech and Mobikwik stocks were the top trading counters, in terms of value.

In a dramatic recovery, the Nifty gained 229 points from the day’s low and closed flat. It fell below the two-week low before it recovered. It faced a resistance at 200EMA. The volumes were much lower than the previous day. No fresh directional bias was evolved. The Index is holding the 50-week average. It is able to avoid the big negative close below the previous low. The index has not given any fresh directional bias clues. It only formed a lower low. Try to avoid the long positions for now. Let us wait for a directional trade.

The Nifty gained by 1,843 points or 8.46 per cent in 2024 and formed a shooting star candle. The shooting star candle was also formed in the half-yearly chart. importantly, it closed below the previous quarter’s low. It registered a ninth successive positive closing year. The volumes were higher than the previous two years. The domestic inflows nullified the impact of FII selling pressure. On a monthly chart, three consecutive bearish candles and the MACD are about to give a bearish signal. As all the long-term charts show bearishness, it is better to wait for a reversal before building the portfolio. The Nifty did not close negatively for the fourth consecutive month since 2016. Hope that 2025 will begin with a positive monthly close.

(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)