Indicators hint bearish confirmation

On a weekly expiry, the Dalal Street traded with high volatility. The Indian benchmark indices opened with a huge gap-down with negative global markets. The Nifty traded in a 200 points range and finally closed with a 22.90 points decline at 17222.75. The Nifty Media index is the top gainer with 5.91 per cent. The Nifty Metal, IT, and Pharma indices are up by 1 - 1.5 per cent. The Bank Nifty and the Fin Nifty were the top losers with 1.72 per cent and 1.56 per cent. The India VIX further down by 3.3 per cent. The market breadth is negative as 1201 declines and 856 advances. About 36 stocks hit a new 52-week high and 104 stocks traded in the upper circuit. Kotak bank, ZEEL, Reliance were the top trading counters today.

Buying and selling bouts on expiry day, with high volatile swings, the benchmark index Nifty finally closed in negative territory, as forecast yesterday. Opened with a gap down, the open is low, recovered smartly and closed above the 50DMA for the third successive day. Though the index is oscillating around 50DMA for the past five days and it is still in a downtrend. The Nifty is mostly moving in the 17090-355 zone. Currently, the 200DMA support is placed at 17029. The distance between 50 and 200DMA has declined. Before the monthly expiry, the Nifty 16938-17353 will act as a crucial support and resistance. It may not breach these levels this weekend. Breaking either side will lead to a decisive move. On a 75 minute chart, the MACD and RSI are close to getting the bearish confirmations. On a weekly chart, the 20Weekly moving average is still acting as a resistance. The index is forming a hanging man as of now. The MACD line is hanging around the zero line. In any case, it declines below the zero line, and the long-term trend will get further confirmation for the bearish implications. We may get the clear directional bias next week. The sideways movement of the index may result in another round of impulse moves.

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