Key Indices Hovering In Indecisive Mode

The global sell-off and collapse in IndusInd Bank’s share price impacted the opening bell. NSE Nifty and other indices opened on a negative note and recovered later. Finally, the Nifty closed with a marginal gain of 37.60 points or 0.17 per cent at 22,497.90. The Nifty Realty index is the top gainer with 3.63 per cent, followed by Oil and Gas index with 1.21 per cent. The CPSE, Infra, Midcap, FinNifty, Commodities, Healthcare, CPSE, Metal, and Energy indices advanced by over 0.50 per cent to 0.92 per cent. On the flipside, the private bank index is down by 1.38 per cent. The Smallcap, Banknifty, Microcap, IT, and Bank Nifty were down by over half a per cent. The India VIX is up by 0.63 per cent to 14.07. The market breadth is negative as 1,850 declines, and 1,041 advances. About 200 stocks hit a new 52-week low, and 205 stocks traded in the lower circuit. IndusInd Bank, BSE, Zomato, Infosys, and HDFC Bank were the top trading counters in terms of value.

The Nifty opened with an over 114 points gap down but recovered smartly and closed at near day’s high. The weakness in global markets, and a sharp fall in IndusInd Bank, dented the sentiment at opening. ICICI Bank, Bharti Airtel and Reliance led the recovery from the low. The higher volume in the last three days shows the buying interest at the lower level. Previous session’s shooting star candle failed to get the confirmation for its bearish reversals, as the index closed positively. After the first hour of recovery, the index traded in a narrow range, giving an element of doubt. The open interest data shows fresh longs were built up. The midcap stocks were outperformed, but the Small and Microcap stocks were worst hit. As the IndusInd Bank declined by over 25 per cent, the private bank index is down by 1.38 per cent. The Nifty closed above the 8EMA again. The 20 DMA is at 22649, which may act as an immediate resistance. The Monday’s high of 22677 is also a resistance. Only above this zone of resistance the Nifty may try to test the 50DMA of 23105. It is important not to decline below the 22400-300 zone of support. A negative close will trigger the fresh selling pressure. The last two days range 22314-677 is also important for the directional bias. Either side move can result in euphoric price action. Stay neutral for now.

(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)