Positive neutral bias above 19,601pts

The benchmark indices moved sideways before the derivatives expiry. NSE Nifty closed at 19,664.70 points with just a 9.85-point decline. None of the sectoral or thematic indices gained or lost by one per cent. This shows the dullness in the market on Tuesday. The Small-cap index eased 0.57 per cent, followed by the FMCG index with 0.52 per cent. Nifty Media and IT indices declined by 0.86 per cent and 0.54 per cent, respectively. About 61 stocks hit a new 52-week high, and 55 stocks traded in the upper circuit. HDFC Bank, Cochin Shipyard, and Reliance were the top trading counters today in terms of value.

The Index has formed an inside bar and traded between the 20DMA and 50DMA. The price action is limited to 62 points. It was a dull trading just two days before the expiry. This behaviour reflects that the traders are not interested in taking fresh positions, showing the complacency present in the market. The dull volumes also reflect the condition. The Rollovers were just 37.55 per cent. The previous day’s range 19734-601 is crucial for the directional bias. Yesterday’s Doji candle failed to get the reversal confirmation. The 19,718 (20DMA) and 19,633 (50DMA) zone is also important levels to watch a day before the expiry. As discussed on Monday, as long as the Nifty trades above 19,601 points, be with a positive neutral bias. Even today’s candle is also an indecisive candle. As it is inside bar, a close above the Doji candle high will give a confirmed reversal signal. A close above 20DMA will add momentum to the upside. But the next two days will be crucial to form a directional bias. The volatility index India VIX has been advancing for the last two is an indication for the market to experience wide-range movements.

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