More consolidation likely
The benchmark closes flat forming a black candle; MACD has given a fresh, bullish signal; But the RSI struggled to close above the 60 zone
image for illustrative purpose
It closed below the opening level. It formed higher high and higher low candle. The rising trendline acted as support again on Wednesday
Positive Mkt Breadth
- 1,498 advances
- 1,079 declines
- 293 stocks hit a new 52-wk high
- 189 stocks in upper circuit
After a big positive gap opening, NSE Nifty erased the gains and closed almost positive. The Nifty gained by just 1.10 points and closed at 21,930.50pts. The PSU Bank index is the top gainer with 2.86 per cent. The Realty and Media indices were up by 1.84 per cent and 1.20 per cent, respectively. Nifty IT declined by 1.25 per cent and is the top loser. The CPSE and PSE index also declined by 0.60 per cent and 0.17 per cent, respectively.
All other sectoral indices closed with modest gains. The India VIX is down by 1.77 per cent. The market breadth is positive as 1,498 advances and 1,079 declines. About 293 stocks hit a new 52-week high, and 189 stocks traded in the upper circuit. Yes Bank, HDFC Bank, IOB, and SBIN were the top trading counters on Wednesday in terms of value.
With wavering up and downward moves, the Nifty closed flat. A big positive opening did not give a profitable close. The index declined sharply by 193 points from the opening high before settling with a tiny gain. It closed below the opening level and formed a black candle. It formed higher high and higher low candle. The rising trendline acted as support again on Wednesday.
The volume was a little lower on Wednesday. The MACD has given a fresh, bullish signal. But the RSI struggled to close above the 60 zone. The last-hour recovery in the banks, particularly in PSU banks, has led to a positive close on Wednesday, which was led by short-covering because of weekly derivatives expiry.
As the index is indecisive in making directional moves, expect more consolidation and will consume more time. As stated earlier, the previous day’s high and low will act as resistance and support. Unless the index closes below the previous day’s low, do not venture to short the market. If it moves above Wednesday’s high of 22053, there is a higher probability of hitting a new lifetime high and testing the 22232, which is the pattern target. As the Nifty futures weekly expiry is scheduled, expect unexpected moves. Stay cautious on both sides.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
