Stock market on Friday closed slightly higher and flat with BSE 34.29 points at 22,986.00 and Nifty closed nearly unchanged at 6,980. Just below the radar level 7000. Asian Markets ended lower on Friday as concerns about the health of global economy, especially emerging markets threatened investors’ confidence. Chinese and Taiwan financial markets remained close due to lunar New Year.
Nifty started the journey with a bearish note, opened at 7,020 – near to 7,000 radar level. During the second set of sell off – that started at 10.40am, price action indicated bear’s weakness. As a result, bearish candlesticks started to get smaller. This is due to the fact of low participation and weekend profit taking.
When Price action tested 6,875, nifty bounced with a strong impulse movement. Impulse movements usually happen due to influx of large market orders. But in today’s case, we can attribute the movement to weekend’s liquidation. Usually when institutional traders are uncertain, they close their existing positions in weekend to avoid “gapping risks”. We can justify today’s price action due to positioning effects.
Read a short article about Impulse moves here…
Later around the session, Nifty tested the 7,000 radar level. Price action consolidated around the key level until the market close, indicating lack of conviction from both buyers and sellers, either to break the level or move away from it. Towards the close, BSE and nifty traded flat with both indices in red. Despite recovering from 4 days losing streak, it’s the biggest weekly fall since July
