All sectoral indices losing momentum

On a highly volatile week, the equity frontline indices almost erased the previous week’s losses. The Nifty rallied by 446.80 points or 2.03 per cent. The BSE Sensex is up by 1.85 per cent. The Midcap index closed at a new high and above last week’s high. It rallied by 4.72 per cent. The Small-cap index is up by 5.61 per cent. Only the FMCG index is down by just 0.11 per cent. All the other sectoral indices closed higher. The Nifty Realty index is the top gainer with 7.43 per cent, followed by the Metal index with 7.11 per cent. The Volatility index, India VIX, is up by 11.11 per cent to 20.52. The FIIs sold Rs35,532.47 crore, and the DIIs bought Rs33,973.05 crore worth of equities. The Advance-Decline ratio is positive.

The week commenced with a significant recovery of 310 points on Monday, following the breach of the rising channel trend line support. This recovery was accompanied by a notable increase of over 11 per cent in the VIX. The formation of a hammer candle at the support line and the subsequent reversal signal were key indicators of a potential market turnaround. This was further confirmed on Thursday, when a similar candle was formed amidst more volatile moves. The market witnessed at least three over 200-point swings in a day. In a particularly dramatic turn of events, the Nifty gained over 300 points in just 30 minutes on expiry. These two massive days it effectively erased the bearish bias, providing valuable insights for potential trading decisions.

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