NIFTY Forms A Doji Star At 20 Month Moving Average Line
On the technical front, we witnessed the NIFTY forming a Doji star on the monthly charts in August, at the 20-month moving average line
Photo Credit : Umesh Goswami
The bellwether index continued its seemingly endless flip flop last week, frustrating investors and traders alike. The lengthy time correction that began more than 20 months ago seems to be continuing unabated, with the NIFTY continuing to oscillate around the strategic 11,000 mark.
Making a strong opening on the news of the RBIs 1.7 trillion-rupee release to the government, the index later settled into a bearish rhythm for the rest of the week, before making a strong closing on Friday, jumping 75 points towards the end of the session after remaining subdued for most of the day.
Friday's actions with respect to PSU Bank consolidations are likely to turn the mood bullish early in this truncated trading week, but we'll need to wait and see how the index behaves thereafter.
What we are witnessing here is a well-matched battle between the bulls and bears, with neither being able to fully wrest control from the other. On the one hand, we've had the AMJ quarter results disappointing again, batting a few sectors. On the other hand, we still have fairly strong domestic liquidity propping up blue chip shares.
On the technical front, we witnessed the NIFTY forming a Doji star on the monthly charts in August, at the 20-month moving average line. We also have key indices entering the oversold territory for the first time since September 2018's sharp correction.
It may be said that probabilities of a sustainable downside below current levels remain low for now. Investors should consider only long positions, but keep in mind that the up move is likely to be long and meandering rather than sharp and energetic.
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