Further profit booking likely
Nifty formed an inside bar,for the second consecutive day, it has formed an open high candle. The Budget will be a trigger for the next leg of the trend on either side
image for illustrative purpose
In any case, if the index closes below 24193 on the weekend, it will form a bearish candle on a weekly chart after five weeks of gap. On the upside, the index must close above 24402 to continue the positive bias. On the downside, the 24141-168 zone is very critical support for the trend to continue
Positive Market Breadth :
- 2766 advances
- 1047 declines
- 144 stocks hit a new 52-wk high
- 130 stocks traded in the upper circuit
- MACD about to give a bearish signal
The equity benchmark indices were nervous before the earnings season and the General Budget. The Nifty closed flat with just 8.50 points decline at 24,315.95. The PSE, Oil and Gas, and CPSE were the top gainers with 1.10 per cent. The Realty is the top loser with 1.49 per cent, followed by Pharma with 0.60 per cent. All other indices closed with modest gains or declines. The Market breadth is positive as 2,766 advances and 1,047 declines. About 144 stocks hit a new 52-week high, and 130 stocks traded in the upper circuit. RVNL, IREDA, HDFC Bank, and Mazdock were the top trading counters in terms of value.
After a volatile session, the Nifty closed at flat. It has formed an inside bar. For the second consecutive day, the Nifty has formed an open high candle, which is a bearish signal. On a weekly chart, it formed a perfect Doji, indicating indecision about continuing the rally. On Thursday, the index declined with a higher volume and recovered from the low with a low volume. We can consider recovery from the day’s low because of expiry trades. The MACD line and Signal lines are at a confluence and about to give a bearish signal.
The Nifty has been consolidated within a range for the past seven days. Previous sessions bearish engulfing candle did not get the confirmation for its implications, but it is still valid as the index formed an inside bar. In any case, if the index closes below 24,193 on the weekend, it will form a bearish candle on a weekly chart after five weeks of gap.
The 8EMA acted as support for the second day, which is at 24,261. On the upside, the index must close above 24,402 to continue the positive bias. On the downside, the 24,141-168 zone is very critical support for the trend to continue. As the index looks over-stretched, we see more profit booking sessions before the budget. The Budget will be a trigger for the next leg of the trend on either side. Preparations for the General Budget are in full swing, and the market is nervous about the new proposals. The earnings season kicked off with TCS results.
(The author is a Sebi-registered Research Analyst, Chief Mentor, Indus School of Technical Analysis and Financial Journalist)
