Market reading hazy

The gaps caused by overnight volatility continue to haunt the short-term traders despite the Nifty being in a range. The range for Nifty continues to be between 17,280 while on the downside 16,850. This range is in play for some time and a break from this should give the next leg of movement.

Nifty 20 MA on daily is placed at 17,454 along with the direction of this MA on a rolling basis is flat which also adds to evidence that we are in a range-bound action. Weekly 20 MA is placed at 17,278 which is acting as resistance in short term. Bollinger Bands are flattish as well. Market breadth confirms the same with 52 per cent of stocks above 50 MA and 48 per cent above 200 MA (which is deteriorating).

Hence a mixed reading is a signal with no clear sign of participation from most components while on the other hand momentum reading on RSI bull-bear Index suggests a change with almost 62 per cent of stocks having momentum with a bearish bias. Amid ongoing global concerns related to Inflation, interest rates, inverted curves, geopolitical news, and what not, it doesn't make sense to push our bias and give a decisive view. Rather it is also important to sit on the sidelines, let the clear direction be given by the price itself as we come out of range or get better reading in market breadth and momentum.

(The author is Technical Analyst at Finversify, CMT, CFTe)