Nifty must break the 17,460 mark for uptrend to set in

Once again, the equity market failed to sustain at higher levels. Barring Tuesday's move, the Nifty formed the negative bars all four days. The Nifty closed at 17,276.30 points with a 28.30 points decline. Barring Banknifty and FinNifty, all the sectoral indices closed in the negative zone. Banknifty up by 0.18 per cent, and FinNifty advanced by 0.26 per cent. The realty index was the top loser with a 1.25 per cent decline. All other indices declined 0.5 to 1 per cent. The market breadth was negative as 1,429 declines and 635 advances were recorded. About 44 stocks hit a new 52 week low, and 116 stocks traded in the lower circuit. Adani Power, Infosys, and HDFC were the top trading counters.

The benchmark index closed 98.45 points lower after a 681 points volatility. It tested the January 25 low on black Monday. On a weekly chart, the Nifty formed two successive long-legged doji candles. For the last three days, the Nifty has been trading in a tight range, but formed lower low and lower high candles. Since last Friday, the 50DMA acted as a stiff resistance point. It opened with a positive gap and moved above the 20DMA on an Intraday basis, but failed to close above for the third time. The weekly RSI is in a neutral zone and at critical support.

Barring on 20th December 2021, the Nifty formed a base at 16,800-830 zone, which is a strong base support for the market. It broke the upward channel on Monday but failed to show the bearish implication. With the next recovery, the Nifty moved into the channel again. The last three days' bearish candles are indicating the market has formed a minor swing high at 50DMA. The Nifty must break the 17,460 decisively for an uptrend to resume. But, at the same time, a close below 17,100-17,000 zone support may cause a downside and retest the support zone of 16,800. As the market enters the neutral zone, it is better to focus on stronger stocks.