RSI failed to move into strong bullish zone
Relative Strength Index is still below 60 zone; Stay cautious and keep booking profits, Nifty formed a bearish Shooting Star kind of candle after hitting a new lifetime high
image for illustrative purpose
Below this crucial point, 23100-150, the next support is at 22,886 level, below which the index may test 22,610 points, which may be the strongest possible support for now
Positive Market Breadth
- 1,741 advances
- 961declines
- RSI still in below 60 zone
- 178 stocks in upper circuit
- Equal number scrips hit 52-wk high
- MACD gives a fresh bearish signal
The week started on a muted note. NSE Nifty traded in a tight zone and closed at 23,259.20 points with 30.95 points or 0.13 per cent decline. The Smalcap-100 index was the top gainer on Monday, with 1.51 per cent. Realty and Pharma indices gained by 1 - 1.32 per cent. The PSU Bank, Consumer Durables, Infra, and Energy indices gained by 0.56 per cent to 0.75 per cent.
The Nifty IT is the top loser with 1.83 per cent. Bank Nifty, FinNifty, and Services index declined by less than half a per cent. The India VIX further down by 2.87 per cent to 16.39. The market breadth is positive as 1,741 advances and 961declines. About 178 stocks hit a new 52-week high and another 178 stocks traded in the upper circuit. Mphasis, HDFC Bank, Idea, and REC were the top trading counters on Monday, in terms of value. The Nifty hit another all-time high on Monday with below-average volume.
The index failed to sustain at higher levels in the late afternoon session. It traded in the 183.45 points range for the day. It has formed a shooting star kind of candle, which is bearish. The price pattern is also looking like an evening star. As we expected last weekend, a minor profit booking was seen. The Nifty traded in the first hour’s range.
The RSI is still below the 60 zone. Even after the strong bullish move, the RSI failed to move in the strong bullish zone. The index closed flat to negative, with high volume selling in the last hour. The Hourly MACD has given a fresh bearish signal at the end of the day. As mentioned in the previous column, the Pharma and FMCG sector stocks were in the limelight.
On Monday, the index almost tested the rising channel breakout level. Below this crucial point, 23100-150, the next support is at 22,886 points. Below this, the index may test 22,610 points, which may be the strongest possible support for now. In any case, if the index fails to move above Monday’s high of 23,412, the downside move will continue and lead to the counter-trend consolidation. For now, stay with cautious approach, and keep booking profits.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)
