Nifty crosses 14k mark but shows slowing signs

The benchmark index Nifty closed above the 14,000 levels for the first time, after a series of indecisive attempts. The Nifty advanced by 36.75 points and closed at 14,018.50. BFSI sectors were the laggards today. Banknifty lost 38.2 points, and the Financial services index also lost 23.5 points. IT, Pharma, Auto sectors led the market today. Interestingly, the broader indices, Nifty Midcap and Small-cap indices outperformed with over one per cent gain. Meanwhile, all the sector indices gained less than a per cent. The overall market breadth is positive, with 1,294 advances and 576 declines. As many as 191 stocks hit a new 52-week high, and only three stocks closed at 52-week low. This shows the strength in the market. The Carbon stocks were in the limelight today.

The New Year started with an optimistic note as the market continued its upward journey and closed at yet another new lifetime high. The Nifty is forming higher highs for the past eight days. But, for the last four days, it is forming small candles indicating the exhaustion in the trend. The Nifty traded in just 58 points range, mostly in first 75 minutes of trade.

The leading indicator RSI failed to form higher highs and is facing resistance at 70 zone. This hidden divergence may cause the trend to halt. The Bollinger bands' narrowing is also indicating exhaustion in the trend. On 75 minutes chart, the 20-period average is working as a support, for now.

The last hour profit booking is also displaying the trend at a peak. As mentioned earlier, as long as Nifty is forming higher lows, continue with the trend. Now the support level further inched up to 13,934-13,863 zone. As long as it trades above 14,020, the market is conducive for elective positions. There are no bearish signs, and no chance to take a bearish view for now. Wait for a clear trend reversal signs to take a short position.

(This author is a financial journalist, technical analyst, trainer, family fund manager)