Nifty closes positive but bearish signs persist
Pharma and IT stocks up by 1.90 per cent and 1.21 per cent; BFSI stocks lag
image for illustrative purpose
The market continues positive strength for the third consecutive day. The Nifty higher by 36.40 points today. But, on a weekly basis, it lost 217 points or 1.46 per cent, and it closed below the weekly opening level.
After filling Monday's gap, the Banknifty closed in negative territory. Only the BFSI sectors laggards today. Pharma and IT were up by 1.90 per cent and 1.21 per cent today . Auto and Media indices also closed higher. Today's market recorded 1,105 advances and 768 declines. India VIX declined by 2.33 per cent.
The Nifty formed another two identical candles on a weekly chart, and both are indecisive Doji candles. It also formed lower lows and lower highs. With the weekend profit booking, the Nifty formed another long upper shadow candle that resembles the shooting star on a daily chart. The bearish momentum further increased on a weekly chart. The negative DMI is above the positive DMI and ADX, and all of them are below 25. This shows the weaker trend strength.
The Nifty moved above the 50EMA weekly because of late afternoon profit booking, and it closed below it. On Monday, it breached the upward channel support but able to close above the support. The 14,469-14,265 support zone was protected this week also. It also faced resistance at 20DMA.
On Monday, 14,661-14,637 may act as immediate resistance. Above this zone, the rally may continue and can test the multiple resistance area of 14,880. In any case, it fails to move above this, the market may consolidate for more time within the mentioned support and resistance zones.
The only good sign is that there is a slight positive divergence on daily RSI. Next week crucial for the direction. A close below 14,469 is a sign of persistence of weakness. Only above 14,880, the market will turn positive.
(The author is a financial journalist, technical analyst, family fund manager)
