Nifty Forms Shooting Star Candle

With the holiday mood, the trading volumes were very thin, and the indices closed flat to nega-tive. NSE Nifty declined by 25.80 points or 0.11 per cent and closed at 23,727.65 points. The Microcap-250 index is the top gainer with 0.63 per cent. The Auto, FMCG, and Oil and Gas indices are up by over 0.55 per cent. On the flipside, the Metal index is down by 0.83 per cent, and the PSU Bank index is down by 0.56 per cent. All other indices were limited to less than half a per cent gains or losses. The India VIX further down by 2.53 per cent to 13.18. The mar-ket breadth is slightly positive as 1,443 advances and 1,334 declines. About 51 stocks hit a new 52-week low, and 80 stocks were traded in the upper circuit. Amber, Mobikwik, Tata Invest, and HDFC Bank were the top trading counters in terms of value.

The Nifty faced resistance at 200DMA for the second day. It formed a Shooting Star candle. It took support at 200EMA. The volumes were low as the holiday mood gripped the market. The index failed to move above the previous day’s high, formed another inside bar, and closed near the day’s low. After a positive morning session, the index failed to sustain the gains till the end. It traded in the just 222 points range for the last two days and has not given any directional bias. It struck between 200DMA and 200EMA. For a directional bias, the index must come out of the last Friday’s range. In this session, the index closed in the lower range of Friday’s range. In any case, a close below 200EMA (23692) will be negative, and it can test the 23,537 (Thursday low). The 50-week average is now at 23,567 points. So, a decline below this zone will trigger a bigger and sharp fall. For and upside move, it must close above the 200DMA of 23,847 points, first and then 24,066. Otherwise, every bounce will be a selling opportunity. Stay cautious!

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