Consolidation may continue
Nifty forms long-legged Doji. For the last 4 sessions, it moved in the range of 16,176 – 16,349 zone. NSE benchmark index formed 2 indecisive and 2 bearish candles in the two days
image for illustrative purpose
The benchmark indices are able to close in the positive territory after 150 points volatility. The NSE Nifty closed almost at the opening level. It closed at 16,280.10 points with a 21.85 points gain. The Bank Nifty closed flat to positive with just 5.15 points. The Nifty IT was up by 0.87 per cent, and Fin Nifty advanced by 0.30 per cent. The Metal and Media indices declined by 2.77 per cent and 2.41 per cent, respectively.
The Nifty Smallcap-100 and Midcap-100 indices were down by 2.30 per cent and 1.09 per cent respectively. The market breadth is extremely negative as 1,601 declines and 356 advances. About 70 stocks hit new 52 week high and 321 stocks traded in the lower price band.
The equity market experienced intense volatility as selling pressure in the broader markets. The extreme negative market breadth and profit booking in metals and frontline stocks move the market on both sides.
The Nifty formed a long-legged Doji. For the last four days, it moved in the range of 16,176 – 16,349 zone. It formed two indecisive and two bearish candles in these two days. The market has witnessed, this is the kind of behaviour in the previous consolidation phase. After an impulsive move, we expected this consolidation. The price is back into the Bollinger bands after three days spent out of the bands. As the consolidation is already four days old, the momentum declining. The consolidation may continue for another two to three days. Even though there are no bearish confirmations, it requires holding the 16,176 level be with the positive bias. For the last two weeks, the market breadth is negative, including the breakout day. The Midcap and Smallcap indices turned bearish, and the Midcap index confirmed the negative divergence with Tuesday's fall. Even the much broader index, representing over 90 per cent of the market capitalization, the Nifty-500 has declined in the last four days. Once the underperforming sector, only BFSI sector stocks keeping the market alive. For, be with a neutral stance as long as it trades within the above range. Either side breakout will give a decisive move.
(The author is financial journalist, technical analyst, family fund manager)
