Nifty moving sideways, avoid positional trade
Overall market breadth is positive with 1,065 advances and 893 declines
image for illustrative purpose
THE last week of the March series opened on a flat note. On the volatile session, the Nifty smartly recovered from the low of the day. It closed with just 7.60 points loss at 14,736.40.
Nifty IT, FMCG and Pharma sectors protected the market from a bigger fall. These three sectoral indices are up by over 1.5 per cent. The realty index is up by 2.7 per cent.
Barring BFSI, all other sectoral indices were up by less than a per cent. Bank Nifty fell by 1.63 per cent, and FinNifty declined by 1.15 per cent. The volatility index rose by 2.53 per cent. Overall market breadth was positive with 1,065 advances and 893 declines.
The Nifty formed a perfect Doji candle as closed exactly at where it is opened. It recovered smartly from the lower levels; with the help of some heavy weight, stock bounced from the day's low. The Nifty moved neither above the previous day high nor below the low. In the other way, it also formed an inside bar. It faced resistance at 50 DMA once again. As we expected yesterday, the consolidation within the last month's thousand points range may continue further unless it breaches the last Friday's low.
On a very lower time frame chart, like 15 minutes to 5-minute chart, the Nifty formed an inverted head and shoulders pattern, which is bullish. The stop loss for the long positions trailed to today's low of 14,597. The bounce of 139 points from the low is a positive sign. Though it closed flat to a very small negative bias, it did not show any weakness at the end of the day.
On a 75 minutes chart, the RSI faced resistance at 50 zone. An hourly closing above this zone will further strengthen the bulls. The Nifty closed above the 38.2 per cent retracement of the recent downswing. As mentioned earlier, the bounce from the gap area will extend up to 14,843 and 14,959 if it sustains above 14,726.
Currently, it is extremely difficult to trade on positionally, as long as the thousand point sideways range continues. At the moment be with positive bias of the previous day as a stop loss.
(The author is a financial
journalist, technical analyst, family fund manager)
