Nifty forms bearish candle

On the weekend, the broader market witnessed a selling pressure. NSE Nifty declined by 83.25 points or 0.42 per cent and closed at 19,541.65 points. All the sectoral indices closed with losses. The Nifty Metal and FMCG indices declined by 1.32 per cent each. The Nifty Realty and Pharma indices were down by over a percentage point. All other indices declined by less than a per cent. The market breadth is negative. About 117 stocks hit a new 52-week high, and 85 stocks traded in the upper circuit. HDFC Bank, Suzlong, and NBCC were the top trading counters today in terms of value.

The Nifty did not sustain at higher levels for the fourth consecutive day. The Nifty erased Thursday’s bounced price action gains. It formed a bearish candle on a weekly chart after two weeks of resilience. The weekly RSI has also declined from a strong bullish zone into a neutral zone. The price structure has been damaged on all time frames, with a percentage points decline this week. It formed an inside bar and a Doji candle on a daily chart. The selling pressure across the board on Friday and all sector indices were closed negatively. The daily range was lower today. The recent 8-day counter-trend consolidation rally extension is completed. Now, the index is at 19,500 zone of support. The index is below the key moving averages of 20 and 50DMAs. Now, the 19,480-420 zone will be the crucial support zone. The previous low of 19,233 is another good support. The daily MACD line declined below zero, signalling the bearish momentum. Depending on global geo-political developments, the markets will react accordingly. For now, there are no chances of building fresh, long positions. Only above the 20DMA, we may see a retesting of the recent minor swing high.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)