Momentum yet to pick up on upside
Better to be on sidelines and avoid aggressive position
image for illustrative purpose
The NSE Nifty staged a smart comeback to above 15,800 level, with the help of banking heavyweights and Reliance. The Nifty gained by 119.75 points or 0.76 per cent and settled at 15,812.35 points. The Bank Nifty rallied by 1.35 per cent and the Fin Nifty up by 1.22 per cent. The private bank and the Smallcap-100 index also gained by 1.38 per cent and 1.03 per cent respectively. Nifty IT and FMCG indices declined by 0.32 per cent and 0.18 per cent. All the other sectoral indices gained by an average of half a per cent. The market is positive as 1,062 advances and 924 declines. About 236 stocks hit new 52 weeks high and 163 stocks traded in the upper circuit. The India VIX down by 2.85 per cent.
The Nifty consolidated its opening gains after trading in a narrow range. It closed near to the day's high and above the 20DMA. The cash segment volume was higher compared to the previous day. It is very crucial to protect the 20DMA for now. The Bollinger bands moving like a parallel railway tracks and contracting. Within the 15,900-15,600 band it is very difficult to find a good trade. Either side of the breakout is necessary for a decisive trade. The market breadth is not so great today.
There is trend strength as the ADX declined to 9.84. The momentum yet to pick up on the upside. As the Nifty formed a small body candle, the indecisiveness still present in the market. On a low volatility, the derivatives segment is also not looking attractive at the current level. The decline in Open Interest shows that the longs unwinding. The Nifty will give the best opportunity to trade only above 15,900 or below 15,600. In this zone, buying interest is also lagging. The Nifty already registered four distribution days in the last 45 days. Any addition of a distribution day count along with decline below the range is negative for the market. Stock-specific activity will continue. It is better to avoid the aggressive position size for the time being, and it is better to be in the sidelines.
(The author is financial journalist, technical analyst, family fund manager)
