It’s time to book profits
Nifty entered into a downtrend with a series of lower lows and a lower high with 4 distribution days
Nifty entered into a downtrend with a series of lower lows and a lower high with 4 distribution days
The intense selling pressure in the broader market led to deep erosions in the values. All the sectors declined. The Nifty is down by 309.10 points or 1.25 per cent. The PSU Bank index is the top loser with 4.18 per cent. The Nifty Smallcap-100, Realty, PSE, and Metal indices declined by 3 per cent to 3.92 per cent. Only the FMCG index is down by less than half per cent. All other sectoral indices declined by 0.78 per cent to 2.99 per cent. The India VIX is up by 4.60 per cent to 14.39. The market breadth is extremely negative as 2507 declines, and only 331 advances. Only three stocks in the Nifty-50 closed positive. About 157 stocks hit a new 52-week low, and 330 stocks traded in the lower circuit. Hyundai, HDFC Bank, ICICI Bank, and Mazdock were the top trading counters in terms of value.
The two days of positive opening ended on a weak note. The Nifty formed another lower low below the previous week’s low. As stated earlier, every bounce was utilised as an opportunity to sell. The Smallcap, Midcap and the PSU stocks were the worst hit. Importantly, none of the sectoral indices were positive. Only four stocks were positive in the Nifty 50, and the broader market breadth is extremely negative. This shows that the uptrend has ended, and the recent high of 25277 is the intermediate high for now. The index closed its lowest level after 16th August, or below the 10-week low. The Nifty registered a fresh distribution day as Tuesday’s 1.24 per cent fall with higher volume. Importantly, it closed below the 20-week average and 100DMA. It has formed a strong bearish candle and closed at the low of the day. The MACD shows a strong bearish momentum. The RSI (33.25) is in the bearish zone and near the oversold or extreme zone. The most dangerous technical event in the session is that the Nifty closed below the 38.2 per cent retracement level. All the sectoral indices broke the topping formations by closing below the prior supports. The selling pressure spread across the sectors. Now, the index entered into a downtrend with a series of lower lows and a lower high with four distribution days. It is also below the medium-term averages. It’s time to book profits wherever is possible. There are very few opportunities in the market for long positions.
