MACD about to give a bearish signal
Daily RSI is also flattened; Now, it is important to sustain above the 24,613 pts, which is 8EMA, a strong short-term support
image for illustrative purpose
As the index closed flat to positive, there is no reversal or a continuation of the existing trend signal. It closed below the opening, and the index may enter into consolidation
Countertrend Consolidation:
- A close above 25,056 with a high volume will be strongly positive
- But, Nifty failed to move above 25,000
- Expecting a countertrend consolidation
- 245 stocks hit a new 52-week high
- 179 stocks traded in the upper circuit
The equity benchmark index closed flat after hitting a new high as NSE Nifty gained just 1.25 points and closed at 24,836.10 points. The PSU Bank index is the top gainer with 2.25 per cent. The Realty and PSE indices are up by 1.43 per cent and 1.17 per cent, respectively. The Oil and Gas, Mid-cap and Small-cap indices are up by over a per cent. The IT and FMCG indices declined by 0.38 per cent and 0.34 per cent. The India VIX is up by 5.70 per cent. The market breadth is positive as 1,629 advances and 1,102 declines. About 245 stocks hit a new 52-week high and 179 stocks traded in the upper circuit. HDFC Bank, ICICI Bank, RVNL and Bandhan Bank were the top trading counters today in terms of value.
The indices reached a new high and tested almost 25,000 (24,999.75) levels. However, the initial gains were not sustained, as the index closed flat with just a 1.25-point gain. The volumes declined for the second day, lower than the previous day. As the index closed flat to positive, there is no reversal or a continuation of the existing trend signal. It closed below the opening, and the index may enter into consolidation. On an hourly chart, the MACD is about to give a bearish signal. The daily RSI is also flattened. Now, it is important to sustain above the 24,613 points, which is 8EMA, a strong short-term support. The index must close above the psychological resistance of 25,000 to continue the rally. As mentioned earlier, the target is at 25,056 points, which is very near. A close above 25,056 with a high volume will be strongly positive. But the index failed to move above 25,000 and closed negative, expecting a countertrend consolidation.
The current price pattern looks like a double-top formation. Let us wait for the confirmation of the reversal. Keep a strict stop loss.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
