Charts indicating weakening bullish bias
Hourly MACD about to give a bearish signal; During the first and the last hours of trading, the volume indicates selling pressure; As the weekly derivatives expiry is in place, expect a volatile session
image for illustrative purpose
NSE Nifty failed to continue the positive momentum and closed below the opening level. The Nifty was down by just 7.65 points and closed at 22,210 points. The PSE and CPSE continued momentum and recorded top gains on Wednesday by 1.76 per cent and 1.49 per cent, respectively. The PSU Bank and Energy indices registered above one per cent gains. On the downside. The FMCG was the top loser with 0.91 per cent, followed by Media with 0.51 per cent. All other sector indices gained or lost modestly. The India VIX is up by 0.38 per cent to 20.27. The market breadth is positive as 1,575 advances and 1,004 declines. About 100 stocks hit a new 52-week high, and 173 stocks traded in the upper circuit. HDFC Bank, AadharHFC, Siemens, and Tata Motors were the top trading counters on Wednesday, in terms of value.
As we expected, the momentum was lost in the benchmark indices. On thin volume, the Nifty traded in the opening hour’s range. It closed the below 8 EMA levels and, below the open, formed a bearish candle. Traders were not interested in taking positions before the event risk. The Nifty is still below the key moving averages. It is 0.36 per cent below the 50DMA and 041 per cent below the 20DMA. On Wednesday, the index faced resistance at the 50DMA. The RSI is flat at 46.46, and the MACD is below the zero line, but the momentum has declined. The Hourly MACD is about to give a bearish signal.
The news-based bullish momentum is fizzling out slowly. During the first and the last hours of trading, the volume indicates selling pressure. The KST is in the bearish set-up. The Elder impulse system has formed another neutral bar. The HDFC decline is a major drawdown for the index for the day. It dragged over 40 points, alone in the Nifty. For now, the 20DMA or 22,317 points and the 50DMA or 22,302 points act as a strong resistance zone. If the decline continues for another day, it will be negative for the positive momentum. On the downside, the 22,150 points will be the crucial support. As the weekly derivatives expiry is in place, expect a volatile session.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
