Nifty stares at heightened volatility
VIX up by 1.77% to 24.60; stay cautious and avoid aggressive buying
image for illustrative purpose
The equities traded nervous on the event risk as election results are scheduled for next week. The volatility index VIX closed at 24.60. As a result, the Nifty future closed with over 173 points premium. Nifty gained by 42.05 points or 0.19 per cent and closed at 22,530.70 points. The Nifty Realty index which gained by 2.34 per cent is the top gainer.
The Metal, PSU bank, and CPSE indices gained by over one per cent. On the flip side, Nifty Media is the top loser with 1.39 per cent. The Nifty IT is down by 1.28 per cent and Pharma is down by 0.92 per cent. All other indices gained or lost by less than a per cent. The market breadth is negative with 1324 declines and 1281 advances. About 54 stocks hit a new 52-week high, and 101 stocks traded in the lower circuit. NHPC, HDFC Bank, Infosys, and Policy Bazar were the top trading counters on Friday in terms of value.
Nifty erased almost all the previous week’s gains. Last week, it traded in a 693.80 points, or 3.09 per cent, range, and finally, it declined by 426.40, or 1.86 per cent, on a closing basis. The weekly volumes were above average after the second of March. It formed a dark cloud cover on the weekly chart, which is bearish. It formed an inside bar on the daily chart. The massive volumes were recorded after 15th March. The index mostly sustained within the first hour’s trading zone.
The 20DMA acted as support for the second day. The MACD is about to give a bearish signal. The RSI is on the 50 line and flattened. The weekly RSI has closed below the 60 line and entered into the neutral zone after March first week. The weekly MACD histogram shows an increased bearish momentum. On the hourly chart, the index failed to move above the moving average ribbon. The India VIX is up by 1.77 per cent to 24.60, which indicates high volatility next week. Stay with utmost cautious and avoid aggressive position size.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
