A linear regression line drawn from the base of the March'20 fall up till the major February 2021 peak (after which we had 2 months of consolidation) is drawn in this chart.
NIFTY50 exited this channel in mid-April 2021.
Since then it has been staying under the channel up until now ( It looks like a pullback )
If you see the daily chart of Nifty50, it is currently just below the regression channel.
Additionally, the 200-day momentum is diverging from price. This is at least a warning.
Three scenarios can unfold from hereon: -
1- A downward reversal from here would mean a major trend change downward
2- Entry back into the regression channel would mean a further bullish scenario for Nifty 50. Then we could see higher targets in the coming months.
3- Nifty50 could again go back into a sideways trend. In such a case, we will ignore this regression channel
What to do now?
- Stay light on your positions until Nifty gives another upward directional cue
- If at all Nifty breaks important levels (say 20 EMA, Fibonacci levels), short positions can be initiated on Nifty as well as its constituents
- In case a consolidation unfolds, a stock-specific approach is advised.
NOTE: This is a 1-2 month view on Nifty50.
********This is not to be taken as a piece of investment advice. All the above views are personal. Please consult your investment advisors before investing******
NIFTY50 exited this channel in mid-April 2021.
Since then it has been staying under the channel up until now ( It looks like a pullback )
If you see the daily chart of Nifty50, it is currently just below the regression channel.
Additionally, the 200-day momentum is diverging from price. This is at least a warning.
Three scenarios can unfold from hereon: -
1- A downward reversal from here would mean a major trend change downward
2- Entry back into the regression channel would mean a further bullish scenario for Nifty 50. Then we could see higher targets in the coming months.
3- Nifty50 could again go back into a sideways trend. In such a case, we will ignore this regression channel
What to do now?
- Stay light on your positions until Nifty gives another upward directional cue
- If at all Nifty breaks important levels (say 20 EMA, Fibonacci levels), short positions can be initiated on Nifty as well as its constituents
- In case a consolidation unfolds, a stock-specific approach is advised.
NOTE: This is a 1-2 month view on Nifty50.
********This is not to be taken as a piece of investment advice. All the above views are personal. Please consult your investment advisors before investing******
