Stroming trade moves above to come

The last hour sell-off erased all the day's gains. Auto, IT and PSU Bank suffer the sudden selling pressure. The Nifty ended at 15818.25 with a 16.10 points loss. The Bank nifty gained by 1.04 per cent. Fin Nifty, Media and the private bank indices are gainers in today's market. The index breadth and the overall market breadth turned negative. The India VIX rose by 1.72 per cent. Even the implied volatility up to 10.62 form 9.47. Today registered 1085 declines and 854 advances. About 239 stocks hit a new 52 week high, and 196 stocks traded in the upper circuit. After several attempts, the Nifty finally failed to close above the 15900 level. It has given hopes of breaking an ascending triangle pattern in the afternoon. But, the last hour sell-off disappointed the market participants. The pattern rule says it should form in 21 days with a lower volume, and a breakout should happen with a massive volume. The current formation is just 15 days old. The Nifty has formed a shooting star or a gravestone doji by erasing all gains of the day. It fell by 113 points from the day's high. As we discussed yesterday, the upper Bollinger band acted as a resistance. Though Bollinger bands expanded with morning gains, it is important to move above the 15900 for further expansion.

An open and closing below the 15800 is negative for the index. The RSI faced resistance at 61 level. The 20 DMA is currently at 15760, which is a very important support. Today, the Nifty tested 28th June high. The 15900-915 zone of resistance is very strong resistance for the Nifty. A close below 15760 or a close above 15900 will give a trending move. An uptick in Implied Volatility is an early indication storming moves about to come. We do not know now as the index is moving in a very tight range. Try to be patient for now for a strong trend.

(The author is financial journalist, technical analyst, family fund manager)