MACD flags fresh bearish signal
Stay on sidelines for next 2 days, expect more sideways moves unless there is an expected impulsive move
image for illustrative purpose
The index lacks the momentum to move higher. The real concerns are market breadth; the declines were outnumbered and low volume. As there are two days left in this expiry, a majority of rollovers already happened last week
The equities on Tuesday given up most of the gains of the previous trading session as NSE Nifty declined by 92.05 points or 0.42 per cent. Nifty Realty is the top gainer with 1.57 per cent, Media index is the top loser with 1.66 per cent. All other indices gained or lost by less than a per cent. The India VIX is up by 4.91 per cent to 12.83. The market breadth is negative as 1,733 declines, and 910 advances. About 71 stocks hit a new 52-week low, and 149 stocks traded in the lower circuit. HDFC Bank, Mankind, IRFC, and Reliance were the top trading counters on Tuesday, in terms of value.
The equity market entered the last three days of the financial year. It was a nervous day in a range-bound trade. The benchmark index has formed an inside bar as it was traded within the previous trading session. The volumes were lower than in the prior days. The index opened on the 50DMA support and was able to close above it. Interestingly, on an intraday basis, the Nifty has traded in the first hour’s range. The index lacks the momentum to move higher. The RSI is back to the below-50 zone, which is not a good sign when we are expecting momentum to pick up.
The MACD line is almost on the zero line; hourly MACD has given a fresh bearish signal. As there are two days left in this expiry, a majority of rollovers already happened last week. Expect more sideways moves for the next two days unless there is an expected impulsive move. The 20DMA (22160) and the 50DMA (21947) will act as resistance support for the next two days. And, Friday’s high and low of 22,180-21,883 will be the maximum range for this series. The real concerns are market breadth; the declines were outnumbered and low volume. Stay on sidelines for next two days.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
