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Clutching to the Last Vestiges of Uptrend


The Nifty 50 has been one of the better performers, and I am much more interested in buying than selling.

  • The Nifty 50 has pulled back a bit during the last couple of days, but now finds itself hanging onto the 200-Day EMA as we have bounced just a bit over the last 24 hours.
  • At this point, the Nifty 50 will have to deal with this area in order to determine whether or not it is going to hang onto the uptrend.
  • After all, a lot of traders will look at the 200-Day EMA as a longer-term indication of the overall trend.

Nifty 50 Index Breakout and Breakdown Scenarios

That being said, we have pulled back towards this area, so think it’s very likely that we could see this market try to get to the ₹18,000 level. After all, we have formed a couple of hammers in a row, which is obviously a very bullish sign. If we get more of a “risk on” type of situation around the world, India should follow right along as a general rule. If we can break above the ₹18,200 level, then I think it’s likely that we continue the overall uptrend. Furthermore, if you look at the chart you can see that there is a channel potentially being formed right now, so we may have some structure entering the market that could be very easily identified.

The alternative scenario is going to be a breakdown below the hammer from the Monday session, which could open up the possibility of a move down to the ₹17,000 level. Breaking below there opens up a flood of selling, as it would break structure quite rapidly and it continued to go much lower, perhaps reaching towards a ₹15,000 given enough time. While I don’t necessarily see that happening right away, it’s very important to know what the other scenario could be. As you can see on the chart, I have a yellow line drawn where I think the market is going to show quite a bit of interest, not only due to the fact that we have the 200-Day EMA, but also the noise that we had seen in this area when you look to the left and go back to the September trading of last year.

All things being equal, I am much more interested in buying than selling, I think that will probably continue to be the case. The Nifty 50 has been one of the better performers, and I think that should continue to be the case.

Nifty 50 chart


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