Stock & Sector-Specific Activities To Continue

The IT and Reliance dragged the benchmark index. The Nifty declined 100.05 points or 0.40 per cent and closed at 24668.25. The Metal index is the top loser with 0.97 per cent. The Auto, commodities, down by 0.74 per cent each. The Energy and Oil and Gas indices are down by 0.60 per cent and 0.58 per cent, respectively. The Realty index is the top gainer with 3.10 per cent, followed by the Media index with 1.45 per cent.

The Midcap, Microcap, and Small-cap indices up by 0.77 per cent and 0.64 per cent. The India VIX spurt by 7.41 per cent to 14.02. The market breadth is positive as 1525 advances and 1320 declines. About 128 stocks hit a new 52-week high and 150 stocks traded in the upper circuit. Swiggy, Dixon, EIEL and HDFC Bank were the top trading counters, in terms of value.

The Nifty formed an inside bar with a lower volume than the previous day. As we expected, the retracement is the reality after an impulsive move. The broader market was outperformed compared to the benchmark indices. The index took support at 8EMA and bounced. As stated, the 24600 is the immediate support now. A close below this level will test the 50DMA of 24200. For an upside, the index must close above this session’s high of 24781. The RSI went back into the neutral zone and declined to 57.25.

The MACD is also showing a decline in the bullish momentum. As the volume was lower and the broader market was outperformed, there was no immediate danger for the benchmark index. The sector rotation is going on. The 50DMA is in the downtrend and may turn flat if the index trades above 8EMA for this week. The index may consolidate within the range for the next 2 -3 weeks. Institutional participation is normally lower at the year-end. Stock and sector-specific activities will continue. Focus on breakouts and new high stocks with high relative strength.

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