Nifty forms a bearish Doji candle
Two back-to-back Doji candles is definitely a warning sign for bulls; Better to avoid fresh long positions for now and staycautious about the existing positions
image for illustrative purpose
The MACD line and Signal line are moving horizontally, indicating the lack of momentum in the market. The hourly RSI has formed a bearish divergence and closed at a critical level. If it closes below 60 on Thursday, the index may decline
Positive Market Breadth :
- 1,403 advances
- 1,283 declines
- 124 stocks in upper circuit
- 156 stocks hit a new 52-wk high
- Hourly RSI formed a bearish divergence
- Hourly MACD gives a fresh bearish signal
The equities rallied further to a new high for the third successive session. NSE Nifty gained by 26.30 points or 0.11 per cent. The Nifty Realty index is the top gainer with 1.66 per cent. The FMCG, Consumption and IT indices closed with moderate gains. The PSE index is the top loser with 0.60 per cent followed by CPSE with 0.45 per cent. All other indices closed with small gains or declines. The India VIX is up by 0.25 per cent to 14.22. The Market breadth is slightly positive, as 1,403 advances and 1,283 declines. About 156 stocks hit a new 52-week high, and 124 stocks traded in the upper circuit. Chennai Petro, IREDA, HDFC Bank, RVNL and IRFC were the top trading counters on Tuesday in terms of value.
The Nifty has become accustomed to hitting new highs almost every day. On Tuesday, the benchmark index formed a new high of 24,661.25 points. The Index opened with a positive gap and high volume in the first hour. Post noon, after the European markets negative opening, the profit booking emerged, and Reliance dragged the index.
The Nifty has formed a bearish candle, a Doji or spinning top. Two back-to-back Doji candles in two consecutive days is definitely a warning sign for the bulls. As the index closed at near the day’s low, it is better to avoid fresh long positions for now. The MACD line and Signal line are moving horizontally, indicating the lack of momentum in the market. The Hourly MACD has given a fresh bearish signal. The hourly RSI has formed a bearish divergence and closed at a critical level. If it closes below 60 on Thursday, the index may decline. The daily RSI is at the bought condition at 74.45. Expect more confusing or consolidating moves from the next trading session onwards. As the Event Risk (Budget) is scheduled for next Tuesday, staying cautious about the existing positions is better.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
