Mkt entering into a consolidation mode

On a choppy day, the benchmark indices ended marginally lower. The NSE Nifty closed at 17,353.50 points with a decline of 8.60 points. Banks and financial stocks were shined in Wednesday's trading. Bank Nifty up by 299.4 points, and Fin Nifty advanced by 0.57 per cent. The broader market indices, Midcap-100 and Smallcap-100 gained by 0.52 per cent and 0.65 per cent. The Nifty Metal index is also up by 0.22 per cent. The Nifty IT down by 0.78 per cent, and the Auto index declined by 0.52 per cent. The overall market breadth is positive as 1057 advances and 860 declines. About 89 stocks hit 52-week high, and 143 stocks traded in the upper circuit.

The Nifty formed a Hanging Man candle for the second consecutive day. It also formed a lower top and lower bottom candle. Though the index recovered smartly from the day's low, it failed to close in positive territory and above the prior day high. The last hour recovery is mainly due to banks and financial stocks sharp recovery. The Bank Nifty closed above the prior day high is a positive sign. The Nifty closing in negative territory with tiny losses and intraday recovery is a sign that bears are failing to gain momentum. The structure is direction neutral. As mentioned earlier, the market entering into a consolidation mode. The consolidation may sustain above the 17,000 level as long as it trades below Monday's high of 17,430 points. Only below the 20DMA of 16,813 points, may turn bearish. Let us be with a sector and stock focus for now.

(The author is financial journalist, technical analyst, family fund manager)