Market is churning in a range for several months and not providing any significant direction yet! Macro economic conditions such as higher commodity prices causing inflationary pressures & war uncertainties are not good for market. So what shall we expect in coming weeks or months!!!
Weekly Nifty chart clearly displays the range bound action with no encouraging signs. If the support at around 15600 is broken then next support is near 14500 followed by 13000 near 200day MA. Remember, the more times an area of support or resistance is tested, the weaker it tends to become.
So far we have tested the support area twice, will third time be charm!!!
So far we have tested the support area twice, will third time be charm!!!
Daily Nifty chart appears to be moving in a down trend channel and now trapped between resistance of 16500 area and support of 15600 area. Remember, we have lot of overhead resistance as Nifty is below 50/ 100/ 200 day MA and will need lot of work before it can make new high. But in right conditions it can certainly turn around.
Take a look at below Nifty advance decline cumulative chart, do we see a pattern!!! Every time this pattern occurred last 4 times, Nifty managed to rally for next month or so. Shall we expect similar outcome!!! Remember, pattern or analogs only work until they don't work.
Unless both lines in bottom chart manage to rise in sync, it will be very difficult for Nifty to stage a rally.
We are at a very interesting intersection, if Nifty breaks the support then things will get messy for months to come, however if right conditions align then Nifty can manage to rally in short term. Its better to have situational awareness so we can take advantage of any rally or manage risk if market drops from current level.
Market remains range bound & weak for now, be cautious!
Market remains range bound & weak for now, be cautious!