Business & Investment

Nifty: Trade Setup: Nifty creates solid support above 16K, avoid shorts for now

After more than two months of strong integration Nifty We finally got out of the wide integration zone and ended the day with a very strong note. The market has opened positively. However, the first hour of trading was traded in the upper zone. Since then, the market has grown strongly. After maintaining a stable gain near the key resistance area, the index saw a sharp incremental movement on the high side and exceeded the 16,150 level. Nifty ended with a strong profit of 245 points (+ 1.55%) while maintaining profits with a good market width.

The Tuesday session was very important from a technical point of view. Nifty removed resistance in the 15,900-15,950 zone after eight weeks of fighting. This resistance has been removed in a compelling way and is now an immediate support zone for the index. This means that as long as Nifty keeps his head above the 15,900-15,950 zone, the breakout will remain valid and valid.

Volatility has skyrocketed. India VIX It rose 7.36 percent to 13.7475. On Wednesday, Nifty may see levels of 16,200 and 16,245 acting as resistance. Since the 50 pack is currently in an unknown area, the resistance level is determined using optional data.

Lower support may be provided at the 16,030 and 15,950 levels. The Relative Strength Index on the daily chart was 65.93. It marked a new 14-period high, a bullish signal. NS RSIHowever, it remains neutral and shows no difference in price.every day MACD Shows a positive crossover. It is currently bullish and is trading on the signal line.

ETMarkets.com

A rising window has occurred. In addition to this, it is not only a gap, but also a withdrawal gap. Most of these patterns resolve in the direction of travel. Pattern analysis shows that Nifty is out of the two-month integration. This created a resistance area of ​​15,900-15,900 for the most direct support if the market was reintegrated in the short term.

Overall, given the strength of the breakout, the market is unlikely to take immediate corrective action. However, if we read the current breakout along with the long-term weekly chart, Nifty has stopped very close to the resistance level that exists in the form of an uptrend line.

With a particular technical structure of daily and weekly charts, it is advisable to do two things. First, looking at the strength of breakouts on the daily chart, it’s best to avoid shorts. New purchases should focus on defensive stocks and remain primarily within the range of large caps and frontline stocks, while maintaining a cautious and positive outlook for the day.

(Milan Vaishnav, CMT, MSTAIs a consulting technical analyst, founder of EquityResearch.asia and ChartWizard.ae, and is based in Vadodara. He can be contacted at milan.vaishnav@equityresearch.asia)

Nifty: Trade Setup: Nifty creates solid support above 16K, avoid shorts for now

https://economictimes.indiatimes.com/markets/stocks/news/trade-setup-nifty-creates-firm-support-above-16k-avoid-shorts-for-now/articleshow/85009888.cms Nifty: Trade Setup: Nifty creates solid support above 16K, avoid shorts for now

Back to top button