The Indian stock market, which heralded the Union Budget aspositive with its price rise, is today seeing the effects of profit booking.
Many investors, probably both big and small, in addition totraders must have been sitting on huge unrealized profits. They appear to be bookingprofits today as most of the stocks are showing technical analysis ShootingStar candlestick pattern.
Shooting Star is a candlestick pattern in which the open andclosing price (or the current price) is nearby and the day’s high is far above thesetwo 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 thatit indicates a rejection of the higher prices by investors. Buyers attempted totake the price of the stock or index (or any other item) up, but the sellerswere so convinced that the high prices are currently unsustainable and thussell in force dragging the price down.
Still, the hope for a bull rally does not appear to bedampened.
The benchmark indices of the Indian stock markets, Sensexand 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, isbarely positive and is holding at 0.06%.
As per broad market as per market capitalisation-wise, wesee that the large and mid-capitalisation stocks are leading and the smallcapitalisation stocks are following behind. The large and mid-cap indices areup by 2.66% and 2.82%, while the small-cap is up by 1.74%
Overall, fundamental analysis-wise the Indian stock exchangelooks primed for a bull run. Technical analysis-wise the market seems poisedfor a small pullback.
Thus, as we see, each market participant has to make their owndecisions regarding their capital and investing / trading in the capitalmarkets.
Finally, anything and everything discussed here is foreducation purposes only.