Weekly MACD Indicates Fresh Sell Signal

The equities are traded in a narrow range on a thin volume. NSE Nifty gained 37.15 points or 0.16 per cent and closed at 23213.20. The Nifty Realty and CPSE gained by 1.39 per cent, and 1.21 per cent are the top gainers. The Infra, PSE, IT, Energy, and Commodities indices gained over half a per cent. The Media and Healthcare indices declined by 1.36 per cent, and 1.27 per cent are the top losers. The Pharma index is down by 1.04 per cent, and the Auto index slid by 0.53 per cent. The India VIX is down by 1.37 per cent to 15.25. The market breadth is positive as 1,535 advances and 1,252 declines. About 85 stocks hit a new 52-week low, and 117 stocks traded in the upper circuit. Adani Power, BSE, Kalyan Jewellers, Zomato, and Adani Green were the top trading counters in terms of value.

The Nifty traded in the small range. For the last two days, it traded within the Monday’s range. This inside price has not given any directional bias, though closing positively. The index has formed lower high candles on the hourly chart, which does not encourage to take bullish bets. After Monday’s huge decline, the retracement is common. Only a move above the 23,340 will provide the counter-trend signals. The 23.6 per cent retracement level is at 23,325. Above this resistance, the index can test 23,500 and 23,637 levels; beyond this, it will be very difficult without strong buying interest. In any case, the index closes below the prior day’s low or this session’s low of 23,134, will be below negative and can test Monday’s low of 23,047. The overall trend is negative; the index may test 22,800-600 zone of support in the short term. The RSI is still in the bearish zone. The weekly MACD has given a fresh sell signal. Even on the hourly chart, the index is trading below the moving average ribbon. The last two days of prices look like a base, but it needs confirmation by closing above Monday’s high. The market breadth is just 1:1 and is yet to improve. Wait for a directional bias to take fresh positions on either side. The weekly closing is crucial.

(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)