Nifty trading near days high; Nifty Metal shines!

And if it moves above the 18-mark, it would be a sign of caution for the market participants.   

Market Update at 03:15 PM: Nifty has seen a scintillating recovery from the lower levels of the day and is trading near the day’s high. It is up by nearly 1 per cent and is trading above the 17,550 mark.

Among the sectoral indices, barring Nifty Auto and Nifty PSU Bank, all other indices were trading in green with Nifty Realty & Nifty Metal leading from the front.   

Market Update at 10:30 AM: Indian markets trimmed all their early gains and have slipped into negative terrain with Nifty trading below the 17,400 mark while Sensex hovering around the 58,400 mark.   

India VIX has shot up by over 2 per cent and is inching closer to the 18-mark. Interestingly, India VIX currently for the 16-week, is trading below the 18-mark and a similar sort of pattern was witnessed just before the pandemic falls wherein, it traded below the 18-mark for almost 18 weeks. And if it moves above the 18-mark, it would be a sign of caution for the market participants.   

Among the sectoral indices, Nifty Realty & Nifty FMCG emerged as the top gainers while Nifty Auto and PSU Banks turned out to be the top losers. 

Nifty opened with a gap-down but the lows were bought in and thus, the index rebounded nearly 150 points from the lows. After moving above 17,600, there was a sharp fall in the second half of the trading session. As a result, Nifty breached its important psychological level of 17,400 on the way down. Nifty declined by 188.25 points or 1.07 per cent and settled at 17,396.90.   

Among the sectoral indices, only Nifty FMCG index ended in the green territory with 0.91 per cent. On the other hand, Nifty metal index turned out to be the top loser with a loss of 6.6 per cent. Three Nifty metal stocks namely Tata Steel, JSW Steel and Hindalco witnessed a sharp fall between 6 per cent and 9.58 per cent. PSU Bank index lost 4.18 per cent. The broader indices i.e. Midcap-100 and Smallcap-100 tanked 2.16 per cent & 1.73 per cent, respectively. India VIX inched higher by 14.83 per cent and closed at 17.49. The overall market breadth is extremely negative with 1,569 declines and 432 advances. About 93 stocks hit a new 52-week high while 151 stocks traded in the lower circuit.   

Nifty registered one of the significant declines in the recent past. It opened below the recent flat base breakout level and filled the opening gap. However, the renewed selling pressure created havoc in the market. The index closed below the opening level and formed a strong bearish bar. It tested the lows of September 14. Nifty has also added another distribution for the second straight session and with this, the total distribution count now stands at three.   

The next level of support is placed at 17,254, which is the flat base support and 17,156 is a 20-DMA. These are the important levels to watch out for in the next two to three days. The RSI declined below the 70 zone and came down sharply from the extreme overbought condition. Even the daily MACD has given a sell signal. Now the +DMI has formed a parallel top and is declining. On an hourly chart, Nifty closed below the MA ribbon while the MACD line is below the zero line, which is a bearish sign. This is a real threat to the market in the short term.