Nifty forms Hanging Man candle
After 7 days of massive rally, the index ended it rally by a decline of just 111.10 points or 0.52%; Before this tiny loss, the index rallied by 2,755 pts or 14.63%
image for illustrative purpose
MKT breadth remains positive
- 1,656 advances
- 816 declines
- 123 stocks hit a new 52-wk high
- 124 stocks traded in upper circuit
- VIX is down by 0.36%
- RSI came down from an extreme level
The equities rallied for a second successive day except banks and financial stocks. NSE Nifty gained by 94.35 points or 0.44 per cent. The Nifty Realty and IT indices were the top gainers with 2.55 per cent and 2.27 per cent. The Metal and Auto indices also up by 1.71 per cent and 1.37 per cent. Bank Nifty and FinNifty were down by 0.73 per cent and 0.60 per cent, respectively. All other sectoral indices were advanced by less than percentage points. The India VIX is down by 0.36 per cent to 13.70. The market breadth is positive as 1,656 advances and 816 declines. About 123 stocks hit a new 52-week high, and 124 stocks traded in the upper circuit. HDFC Bank, Reliance, ICICI Bank, and IIFL were the top trading counters today in terms of value.
The Nifty registered a follow-through day, as it closed positively with a higher volume than the previous day. The Index has retraced by 61.8 per cent of the last two days of high and low. On a weekly chart, the index has formed a Hanging Man candle. After seven days of massive rally, the index has ended it rally by a decline of just 111.10 points or 0.52 per cent. Before this tiny loss, the index has rallied by 2,755 points or 14.63 per cent. With this half a per cent loss, the RSI came down from an extreme level. From now on, the Nifty will mostly consolidate within the range. This week’s high and low will act as resistance and support for next week. Only out of this range will give a directional move on the breakout side.
The index has provided only the exhaustion signal, not a bearish signal yet. Yesterday, the index faced resistance around the 21360 area, as it was a 61.8 per cent retracement level of the last two-day move. As the long weekend, the traders squared off the position at the levels. Be with a neutral bias next week. The volatility may increase as the monthly derivative expiry is scheduled. Stay in sideline. Stock specific activity will continue.
(The Author is Chief Mentor, Indus School of Technical Analysis Financial Journalist, Technical Analyst, Trainer, Family Fund Manager)
