Charts Signal Caution Above 23,900pts
If Nifty fails to hold 200DMA of 23,900pts, it’ll be negative; The next support level at 200 EMA of 23,701
Charts Signal Caution Above 23,900pts
Both averages are in the downtrend. After an impulsive move, the retracement is common.As the index formed a higher low at 23460, it is the final strong support. For an upside move, the index must close above the 24143, the 20DMA. A close above the 24227 will confirm the uptrend
The equities traded nervous on the weekend. NSE Nifty declined by 183.90 points or 0.76 per cent and closed at 24,004.75 points. The Media index is the top gainer at 1.70 per cent, followed by Oil and Gas at 1.26 per cent. The CPSE, PSE, Consumer Durable, and Energy indices were gained by over 0.50 per cent. The Nifty IT is the top loser with 1.41 per cent.
The Pharma and Bank Nifty, Healthcare, Services, and FinNifty declined by over one per cent. The India VIX is down by 1.44 per cent to 13.54. The market breadth is positive as 1,470 advances and 1,349 declines. About 88 stocks hit a new 52-week high, and 139 stocks traded in the upper circuit. ITI, DMart, HDFC Bank, Tata Motors, and Reliance are the top trading counters in terms of value.
Nifty’s benchmark index, Nifty, retraced 50 per cent of the previous day’s massive move. It registered a distribution day, as the volumes were higher than the previous day and above the average. It is also below the 50DMA and 20DMA. Both averages are in the downtrend. After an impulsive move, the retracement is common.
Normally, these retracements ends at 50 per cent. If the index fails to hold 200 DMA of 23,900 will be negative. The next level of support is at 200 EMA of 23,701. As the index formed a higher low at 23,460, it is the final strong support. For an upside move, the index must close above the 24,143, the 20DMA. A close above the 24,227 will confirm the uptrend.
The defensive sectors, IT, and Pharma dragged the market. The broader market indices have outperformed the benchmark. There is not much change in the indicators set up. For now, it is cautiously positive as long as it trades above the 200 DMA.
(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)
