The benchmark index, Nifty50, opened on a positive note but failed to sustain its gains on Monday. It slipped into the negative zone and, for the majority of the time, it remained traded below the 200-day moving average (DMA).
The index formed another bearish candle in a row with a lower-high and lower-low price structure on the daily chart.
The momentum indicator, Relative Strength Index (RSI), on the daily chart is trending in a downward slope in an oversold trajectory and is currently placed around 29, along with a negative crossover on the moving average convergence/divergence (MACD).
Furthermore, the 50-week moving average, currently at around 23,300, is a key level to watch as a strong support zone.
As per O’Neil methodology of market direction, the current market status is in a “downtrend,” as Nifty breached its recent correction low of 23,816.
Nifty Bank (50,363.80)
The Nifty Bank managed to protect its previous day’s low and closed with a minor gain of 0.30%. It formed a green “doji” candle on the daily chart, but still, it is not out of the woods. It has a strong support in the 50,000-49,700 zone, followed by 49,400, which aligns with the 50-week moving average on the weekly timeframe chart.
According to the O’Neil methodology of market direction, the current trend in this sectoral index is a “downtrend”, as it breached its recent correction low of 50,194.
Nifty IT (41,406.55)
The index was the biggest loser on Monday, declining around 2.32% and forming a “shaved head” bearish candle on the daily chart. This index formed a lower peak on the daily chart and closed with a negative bias. However, it managed to hold above its 100-DMA, which is currently placed around 40,900. Hence, this level may act as crucial support in the coming trading session(s).
According to O’Neil methodology of market direction, the current trend in this sectoral index is an “Uptrend Under Pressure”, as it is trending below its 50-DMA along with six distribution days.
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