Nifty forms higher high, low on charts

The equities traded in a tight range and closed with a modest loss. The NSE Nifty declined by just 20.55 points or 0.11 per cent and settled at 18,239.15. The Nifty Metal and Realty indices were the top gainers with 1.73 per cent and 1.13 per cent, respectively. The Nifty IT, Auto and Pharma indices advanced with small gains. The Media index declined 2.40 per cent for the day. The other indices are down by less than half a per cent. The market breadth is negative as 1,059 declines and 864 advances. About 66 stocks touched their 52-week high and 82 stocks traded in the upper circuit. HDFC Bank, Hindalco and Zomato were the top trading counter on Monday in terms of value.

A positive opening lost its momentum after first-hour trading. Intraday bounces were not sustained and closed negatively finally. But still, the benchmark index is not showing any confirmed weakness.

The volume was dried and recorded lowest after 24th October. There is mild profit booking on Monday. On an hourly chart, the Nifty closed on the 8EMA support and below the 5EMA. As it closed below the open and formed a bearish bar, the time has not come to be with a negative view.

In the current upswing, most of the daily bars are negative. They are formed in higher highs and higher lows.

Very few bars closed below the prior bar low. As mentioned earlier, only in case of a close below the prior low, it will give authentication for negative bias. On Monday also it formed a higher high and low candle. The market breadth has become negative, and the Nifty breadth is at 1:1. Interestingly, the VIX is up by 3.51 per cent. It is better to stay cautious and get ready to book profits further. Do not be aggressively bullish for now.

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