Nifty likely to further consolidate within the range

The resilience of our markets continues, even though global market meltdown. The global weakness impact is limited to the opening bell. The NSE Nifty closed with just 73.65 points decline after a 220 points gap-down opening. It settled at 17241.

The Nifty IT index is the only gainer on Monday with 1.06 per cent. The Nifty FMCG and Media indices are down by 1.10 per cent and 1.07 per cent. All other indices declined by 0.1 per cent to one per cent. The India VIX is up by 4.31 per cent. The market breadth is negative as 1,333 declines and 581 advances.

The Nifty smartly recovered over percentage points from the day's low. After opening with 220 points huge gap down, it is able to protect the opening low and bounce sharply. The intraday dips are used for buying opportunities. Before the earnings season begins, the IT pack has led the recovery on Monday. The Nifty has formed another lower-high candle.

As mentioned earlier, the index is within the range. The 200DMA further flattened, and the 20DMA further down. Even on the hourly time frame, the index is in the neutral zone.

It closed in the moving average ribbon, and the MACD line is on the zero line. This shows the index may further consolidate in the range. Only in case of negative results from earnings, this will trigger negative sentiment. Our markets are mostly insulated from the global meltdown and outperforming. There is not much change in indicators, and the directional bias is also the same.

As long as, The Index trades between17420 and 16985, the market is directionless. Volatility may increase because of earnings and stock-specific action. As the 20DMA is in a downtrend and the Bollinger bands are expanding, the probability of testing the previous low is high. For now, be on the sidelines and apply neutral strategies in the market.

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