RBI measures fail to enthuse market

The neutral monetary policy by RBI sustained the initial positive bias. But, the market failed to continue the momentum till the end. The Nifty gained by 135.55 points and settled at 14,819.05. All sectoral indices closed in green territory. The auto index is the top gainer with 1.71 per cent. The Banknifty gained by 1.51 per cent and the IT index up by 1.13 per cent. The smallcap-100 and midcap-100 outperformed with benchmark indices by gaining 1.71 per cent and 1.32 per cent, respectively. The market breadth is positive as 1,264 advanced and 621 declines. 97 stocks hit a new 52-week high today

The Nifty once again tested the 14,880 on an eventful day but failed to move on a neutral monetary policy. It also reclaimed the 50DMA for the fourth time in the last 13 days. In any case, it sustains above the 50DMA (14,794) will be a positive sign for the market. The derivative volume recorded lowest since March 10. And the PCR reached an extreme of above 1.71, which is not a good sign.

Post RBI policy, the Nifty traded in a very tight range. After the first two hours of move, it has not shown any positive signs about the direction. The 14,880 levels have become a Herculean resistance in the market. It has tested the fifth time and failing every time.

On a lower time frame, the index showing some positive momentum, the MACD line is above the signal line on a 75 minutes chart. But, there is a negative divergence in RSI on the same chart, which is negative. As the weekly derivative expiry in place, the market may witness a volatile session. In any case, the Nifty trades above 14,880, be with a positive bias and go with a long position. But, moving below 14,775, and sustaining for at least one hour is negative. As the Covid cases are on the rise at a record level and the earnings season kicks off, the market may turn cautious.

— The writer is a financial journalist, technical analyst, and family fund manager