Nifty forms Hanging Man candle at all-time high
On a weekend, the equities traded nervously with yo-yo movements.
image for illustrative purpose
On a weekend, the equities traded nervously with yo-yo movements. NSE Nifty closed flat to negative. It ended with just 4.75 points decline and closed at 22,212.70 points. The Media and Realty indices were the top gainers with 1.36 per cent and one per cent. The Pharma and Consumer Durable indices gained by 0.42 per cent, and 0.60 per cent, respectively. The PSU Bank was the top loser with 1.15 per cent. All other sectoral indices were closed with either less than half a per cent gain or loss. The India VIX is down by 1.48 per cent. The Market breadth was slightly positive as 1,367 advances and 1,181 declines. About 171 stocks hit a new 52-week high, and 109 stocks traded in the upper circuit. JioFin, Idea, Reliance, and HDFC Bank were the top trading counters on Friday, in terms of value.
The Nifty finally closed above the 21,137-22,127 zone on a weekly basis and registered the highest-ever close. It has formed a hanging man candle at an all-time high. The breakout is with a lower volume than the previous three weeks. Even previous day’s all-time high close with low volume. As mentioned earlier, the volume trends are confusing the traders. Generally, during the pattern formation, volume declines. But, the latest ascending triangle formed on high volume and the breakout was with low volume. After the breakout, the price must move impulsively. The absence of these characters leads to doubts about the breakout. At the same time, there is no weakness visible. The RSI’s negative divergence on the daily and weekly time frames adds to our doubts.
Even the weekly MACD histogram shows waning momentum. The Relative Strength is still poor and showing under performance, compared to the broader market indices. The 10-week average support is moved higher to 21750, and the 50DMA support is at 21688. If the Nifty is able to close below, this crucial support will be negative. Others stay on with cautiously optimistic bias. Managing the risk is crucial now. Keep booking profits partially.
