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Nifty 50 Starts the Week with a Bounce; Sideways Market Persists

Published 04/22/2024, 02:10 PM
NSEI
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The last week was a tough one for bulls as the benchmark Nifty 50 index took a decent hit, falling almost 1,000 points from the all-time high. However, traders should have known about the strong support around 21,700 - 21,800 which was keeping the index from falling for some time.

Previously as well, the index took support from this zone and reversed to touch a new all-time high. And again, last week, this level was beautifully tested and traders were all geared up to grab the opportunity, at least for a temporary bounce, which we are now witnessing.

In the previous analysis of Niofty 50, we have been talking about the trend which had returned sideways after some correction from the highs. However, the strong downtrend should not be perceived as long as the support of 21,700 - 21,800 is intact. Till then, the direction of Nifty 50 can be deemed as sideways, which gives a good opportunity to mean reversion traders.

In this type of environment, buying the dips and selling the rallies work well as market participants lack clarity on the future trajectory of the index, resulting in a strong tussle between bulls and bears.

On Monday, Nifty 50 started the week on a positive note, currently up by 150 points to 22,296, by 11:34 AM IST. This gain has materialized on top of another rally of 151 points on Friday. Totaling over 300 points uptick in two sessions. There is still a gap left on the daily chart, and to fill it, the index needs to travel to 22,503.

This gives a further potential of around 200 odd points from the current levels but despite such a recovery (if it materializes), the broader trend still remains neutral/sideways. The continuation of the uptrend will take place, once the all-time high is breached again.

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X (formerly, Twitter) - Aayush Khanna

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