Indicators Show Strong Selling Pressure
The broader market indices were outperformed; Stock-specific activity is more in the mid and small-cap space; Stay focused on them
Indicators Show Strong Selling Pressure
On a lower time-frame, the index indicates that the last four weeks of uptrends are in danger, as it closed well below the 23.6% retracement level of the prior uptrend. For now, the 20DMA of 24314 is the only hope. Below this, expect a decline below 24,000
The equities tumbled on all-round selling pressure, and the frontline indices extended the losses for the second day. NSE Nifty declined by 337.50 points or 1.36 per cent and closed at 24401. Only Media index is positive with 0.02 per cent. The Infra, Commodities, Metal, Energy, Oil and Gas, PSE, Auto, and CPSE, indices declined by over 1.5 per cent. A majority of sector indices declined over one per cent. The market breadth is negative as 1854 declines and 953 advances. About 122 stocks hit a new 52-week high, and 123 stocks traded in the upper circuit. EIEL, Mazdock, Swiggy, Reliance and Zomato were the top trading counters in terms of value.
The Nifty declined decisively below the 50DMA and also below the inverted head-and-shoulders breakout level. It tested the 20DMA, too. The volumes were higher than the previous day, and a distribution day was registered. The last 30 minutes of high-volume selling is a big worry. Though the index is still in last Friday’s range, inside the action, this session’s sharp fall is showing a comfortable structure. On a lower time-frame, the index indicates that the last four weeks of the uptrends are in danger, as it closed well below the 23.6 per cent retracement level of the prior uptrend. It also closed below the 78.6 per cent retracement level of the Friday move.
With this, the Nifty erased all the gains from last week. The extreme negative breadth and decline of all the sectoral indices show strong selling pressure. The RSI close below 50 is another big negative of the day. The MACD is about to give a fresh sell signal. For now, the 20DMA of 24314 is the only hope. Below this level, we expect more selling pressure and a decline below 24,000. The broader market indices were outperformed. The stock-specific activity is more in the mid and small-cap space. Stay focused on them.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
