The Indian stock market, which heralded the Union Budget as positive with its price rise, is today seeing the effects of profit booking.
Many investors, probably both big and small, in addition to traders must have been sitting on huge unrealized profits. They appear to be booking profits today as most of the stocks are showing technical analysis Shooting Star candlestick pattern.
Shooting Star is a candlestick pattern in which the open and closing price (or the current price) is nearby and the day’s high is far above these two prices. Also the low of the day is near to the open and the closing prices. So, the pattern resembles an upside-down cross.
Technical significance of this candlestick pattern is that it indicates a rejection of the higher prices by investors. Buyers attempted to take the price of the stock or index (or any other item) up, but the sellers were so convinced that the high prices are currently unsustainable and thus sell in force dragging the price down.
Also read: UP cops tell disabled widow to pay for diesel to find kidnapped daughter
Still, the hope for a bull rally does not appear to be dampened.
The benchmark indices of the Indian stock markets, Sensex and Nifty 50 are up. The former is up 2.37% and the latter is up is 2.66%.
The fear index of the Indian stock market, India Vix, is barely positive and is holding at 0.06%.
As per broad market as per market capitalisation-wise, we see that the large and mid-capitalisation stocks are leading and the small capitalisation stocks are following behind. The large and mid-cap indices are up by 2.66% and 2.82%, while the small-cap is up by 1.74%
Overall, fundamental analysis-wise the Indian stock exchange looks primed for a bull run. Technical analysis-wise the market seems poised for a small pullback.
Thus, as we see, each market participant has to make their own decisions regarding their capital and investing / trading in the capital markets.
Finally, anything and everything discussed here is for education purposes only.