Charts still indicate bearish bias

The Nifty recovered from the day's low and closed positively for the second successive day. It gained by 27.45 points and settled at 17604.95. Only IT, Pharma and Auto indices ended in the negative zone. Realty and Media indices are top gainers with 1.81 per cent and 1.74 per cent, respectively. The other indices are up by 0.14 to 0.88 per cent. The market breadth is positive as 1217 advances and 642 declines. About 78 stocks hit a new 52-week high and 94 stocks traded in the upper circuit. Reliance, RBL Bank and Bharti Airtel were the top trading counters on Wednesday.

The Nifty once again opened with a gap down and recovered for the second successive day. It tested the previous day's high and decisively closed above the 13EMA. A day before, the rollovers improved to 56.45 per cent. Like yesterday, the volume jump indicates the short covering as expiry is just a day away. The Nifty traded in the 17520-627 zone during the day.

The index attempted to cross the moving average ribbon on the hourly chart but failed close above it. The MACD line is also still below the zero line. The 17625-17710 may act as a strong resistance zone for now. The daily MACD histogram shows a further increase in the bearish momentum. A close below 17432 (20DMA) and the RSI decline below the 60 zone lead to a continuation of the down move. Even after two days of sideways movement, the Elder impulse system failed to form a bullish bar. The KST and TSI indicators are still in a bearish setup. The RS momentum is below 100. The Nifty is trading below the previous week's low. It is almost at the year's opening level. As the monthly expiry is on the cards, the market may experience volatile moves. At the same time, the weekly closing is also crucial for the near future trend. A decline below 17500 will be bearish for the market. A move above 17710 will be a positive sign.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)