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Bank Nifty

Structure change

Banknifty has gone from a HH/HL structure to a LH/LL structure indicating a change in Trend from uptrend to downtrend.

This indicates no more longs in the market, tighten stop loss and book profits.

New Highs New Lows

Market Breadth

The Net of “New Highs / New Lows” has been historically a leading indicator used by Legendary Traders like Loeb, Dreyfus, Darvas and others after them.

Today NH/NL declined sharply and ended in double digits at 93 compared to other days being well over 200.This goes to show that the marked has topped out for now and in correction mode.

% stocks above 20dma

Market Breadth

The % of stocks above 20dma which shows a short term trend has also topped out on 5.1.24 and formed a lower top on 12.1.24 indicating a trend downwards.

Once this number is below 50% there will be more pressure to go downward.

Short term trend

Market Breadth

In the broader market index of stocks in Nifty 500, the shorter term trend is turning over to the bearish side.

This is now a tug of war between the Bulls and the Bears.

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As pointed out in last several weekly reports the market looked extended and it was giving clear signs of a correction since mid-Dec’23 and today was a confirmation of this.

Now we wait for a bottom to be in place (in days or weeks), a decent consolidation and probably Nifty re-basing before we start climbing up.

All depends on how we close this weekend.

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