Charts indicating caution on upside

THE April derivatives series has begun on a positive note. Following the Supreme court judgment, the Tata Group stocks were in the limelight. The Nifty gained by 182.4 points and closed at 14,507.30. During the week, the Nifty lost 236.7 points or 1.61 per cent. It lost for the second consecutive week. All the sectoral indices ended in the green. Metal index up by 3.68 per cent, is the top gainer today. The broader market indices performed well. FMCG, Realty, Financial services indices advanced by over one per cent. The Nifty mid and small-cap indices outperformed the benchmark indices by 1.5 per cent. The overall market breadth was positive as 1,145 advances and 741 declines. As the market moved sideways, the volatility index India VIX was down by 9.02 per cent.

The week ended with a dull day. The Nifty has formed an indecisive and inside bar. It traded in 155 points range with low volume. Almost 180 points positive opening failed to move higher than the previous day's high and formed an indecisive doji candle. The momentum is sluggish in the afternoon session. In the last 15 minutes, the Bank Nifty rose by 300 points has created a small body green candle. Once again, the bears failed to pull the Nifty below 14,469 on a weekly closing basis.

After filling the post-budget day gap on Thursday, Nifty is hesitant to move either side. It formed a perfect doji candle. For next week, the Nifty may find it difficult to cross the 50DMA. A close above 14,765 will be a positive sign for the market direction. Otherwise, a close below 14,469 for at least two days will take the Nifty to further downside. As Monday is a holiday for the market, and there are two days of financial year closing, there is a possibility of increased activity by institutional investors to rejig the portfolios and maintain the NAVs. The longer-term charts suggest the caution on the upside.

(The author is a financial Journalist, technical analyst, family fund manager)