Nifty forms lower low, lower highs

The domestic market began the week marginally lower with lackluster trading. The NSE Nifty closed at 15824.45 points, a 31.60 points lower. Metal, Pharma, Media, IT, and Smallcaps outperformed the benchmark indices. They closed with an average of half a per cent gain. Only the energy index closed with a one per cent loss. All the other indices closed slightly lower. The overall market breadth is negative as 1,066 declines and 974 advances. About 210 stocks hit the new 52-week high, and 170 stocks traded in the upper band. India VIX is up by 5.84 per cent.

The Nifty once again faced stiff resistance near 15,900 level. As soon as it reaches the level, the selling pressure has increased. It closed below the opening level and in a negative zone. It formed a small body candle and showed an accreted indecision. Leadership is missing in today's trading. The market breadth is also more neutral. After the first hour of trading, the Nifty formed lower low and lower high bars. The MACD is almost near the zero line on 75-minute chart. The trend strength is declining further, ADX is gradually making lows. Interestingly, the +DMI and -DMI are declining together is also another sign of uncertainty about the trend.

The Nifty traded within the Friday range and formed an inside bar. With today's price action, Friday high 15899 and low 15768 are the important resistance and supports for the next two days. The rollovers may play a significant role as the monthly derivative series expire in the next three days. As of today, the rollovers are less than three and six month averages at 23.67, indicating traders are not interested in the rollover as there are no clues about the trend.

(The author is financial journalist, technical analyst, family fund manager)