Nifty Forms Shooting Star Candle

Tuesday’s high of 25907 is crucial now,a move above it will boost the sentiment and test the gap area. On the downside. 25660 may act as immediate support. The 20DMA support is at 25505, which is strong support

The equities traded sideways, mostly stock-specific. NSE Nifty closed flat with 13.95 points decline at 25,796. 90 points. The IT index was the top gainer with 1.17 per cent. The Smallcap and MNC indices went up by 0.79 per cent and 0.55 per cent, respectively. The CPSE and Energy indices are down by 0.75 per cent. The Oil and Gas declined by 0.67 per cent. All other indices closed with marginal gains or losses. The India VIX was down by 6.26 per cent to 11.98. The market breadth is positive as 1,639 advances, and 1,137 declines. About 101 stocks hit a new 52-week high, and 154 stocks traded in the upper circuit. Reliance, HDFC Bank, Nalco, and Paytm were topping the trading counters in terms of value.

On holiday mood, the equities traded rangebound and were stock-specific. The news-driven auto, IT, and metal stocks were in the limelight. The Nifty traded in 0.65 per cent range for the day and formed a Shooting Star candle. It did not sustain the recovery efforts and finally closed below the previous day’s low. The volumes were lower in the last seven days. The index closed flat, but the index breadth is negative. The 20DMA shows signs of flattening, indicating more consolidation on cards. The RSI just closed on the 60 line. A decline below 60 means the index enters into a neutral zone from an extremely bullish zone. The MACD is about to give a bearish signal. As mentioned on Monday, the hourly RSI is bouncing from an oversold zone. This may continue till Thursday, which may result in a bounce in the Nifty; Tuesday’s high of 25,907 is crucial now as a move above it will boost the sentiment and test the gap area. On the downside, the 25,660 may act as immediate support. The 20DMA support is at 25,505, which is strong support. We can’t project more than this for now. As mentioned earlier, the earnings will influence the future direction. Till then, the benchmark may consolidate within the range.

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