Nifty forms long-legged Doji

A fresh Russia-Ukraine crisis news flow dented the market sentiment. The Dow futures declined over 300 points from the day high, has triggered the selling pressure in the domestic market. The equity benchmark indices were down for the fourth consecutive day. The Nifty closed at 17206.65, with a 69.65 points loss. Barring Bank Nifty and FinNifty, all the sectoral indices ended in the red. The Bank Nifty and FinNifty were up by 0.23 per cent and 0.03 per cent, respectively. The Metal and the media indices were down by 2.07 per cent and 2.71 per cent. The Realty, Energy, PSE, and the PSU Bank indices are down by 1.5 per cent. The Smallcap-100 index is down by 2.73 per cent, and the Midcap-100 index declined by 1.24 per cent. The India VIX is up by 3.33 per cent. The market breadth is extremely negative as 1787 declines and only 322 advances. About 116 stocks hit a new 52-week low, and 253 stocks traded in the lower circuit.

The market witnessed another day of volatility. The Nifty traded in over 280 points range and finally settled below Friday's low. It formed a long-legged Doji candle after facing stiff resistance at 20DMA. It also formed another lower high and lower low candle today. After opening with a negative gap, and fell below the 17100 level, as we expected. The intraday recovery from the channel support line towards the 20DMA did not sustain till the end. The index is failed to form the higher high even on the 75-minutes chart. This shows the intraday recovery has not changed any trend dynamics.

The MACD histogram shows an increased bearish momentum. RSI further declined to 45, in a neutral zone. On a 75-minute chart, the Nifty is below the moving average ribbon, and the MACD is below the zero line, which is a strong bearish signal. In fact, in all time frames, the MACD is bearish. With the geopolitical tensions, the investors are not willing to take risks at the current levels. They are using every high as a selling opportunity for the last three days. It is better not to have long positions and high leveraged positions. Market breadth shows broader market weakness. Several Nifty 500 stocks are below the 50DMA and in the downtrend. At present, the market is not conducive to fresh purchases.