Indicators indicate unexpected moves
On Budget day, Index may trade between 24,514 and 24,264 points; If it moves below the 24,264 level, we may see intense profit booking; If it moves above 24,514 level, expect a sharp upside move
image for illustrative purpose
A day before the event risk, the Nifty closed flat after a nervous trade. It opened with a negative gap below the previous day.The momentum is clearly negative. It closed just below the 8EMA support after 4th June. The PSE stocks recovered from the prior day’s losses
Positive Market Breadth :
- 1,544 advances
- 1,179 declines
- RSI declined to 65.5
- 122 stocks in lower circuit
- 70 stocks hit a new 52-wk high
- MACD shows an increased bearish momentum
The market was nervous and traded in a range before the event risk. NSE Nifty closed with a 21.65 points loss and closed at 24,509.25 points. PSE and CPSE were the top gainers, with 1.83 per cent and 1.48 per cent, respectively. The Auto Pharma indices are up by 1.15 per cent and 1.06 per cent. On the flipside, the Oil and Gas index is the top loser as it declined by 0.62 per cent. The Realty, IT, and FMCG were declined by less than 0.50 per cent. The VIX is up by 4.13 per cent to 15.43. The market breadth is positive as 1,544 advances and 1,179 declines. About 70 stocks hit a new 52-week high, and 122 stocks traded in the lower circuit.
HDFC Bank, HAL, Reliance, and Mazdock were the top trading counters on Monday in terms of value.
A day before the event risk, the Nifty closed flat after a nervous trade. It opened with a negative gap below the previous day. Reliance, Kotak Bank and ITC dragged the market. The index recovered from the day’s low as the HDFC Bank contributed about 65 points; the index settled down at 8 AM. The momentum is clearly negative. It closed just below the 8EMA support after 4th June. The PSE stocks recovered from the prior day’s losses. The RSI declined to 65.5, and the MACD histogram shows an increased bearish momentum.
On a Budget day, the Index may trade between 8EMA and the 20DMA. Watch the Nifty move post budget, and if it moves below the 20DMA of 24264, we may see an intense profit booking. If it moves above the 8EMA of 24514, expect a sharp upside move. For the last two days, an increase in volume shows distribution. The implied volatility has shot up to 24, which is very high. The option premiums are also expensive, and volatility spikes. The Nifty open interest is up by 3.06 per cent. These data points show unexpected price movements.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
