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Nifty 50 - Short Term Bearish Pattern

Updated: Dec 23, 2022

As stated in our previous technical journal 18600 is a strong resistance zone and the Nifty 50 Index should cross it as soon as possible to stay above to maintain an uptrend, but as we could see, the Nifty 50 Index has given up, and crawled into a time-based bearish trend for the time being.

Nifty - 50 Index Monthly Chart

The monthly chart was indicating from the last two weeks, that Nifty-50 Index is turning into a bearish trend zone and at last the weekly, as well as daily charts, also proved it correct. Over the last week, the index tried a few times to stay above 18600, but at last, gave up before making 18200 a support zone for the time being.

Nifty 50 - Index Weekly Chart

The Nifty 50 Weekly Index chart was struggling to stay above the previous week's low, but the last two days of very heavy selling in the cash segment by FII's, ensured it close below the previous week's low point.

Generally, big players start cash segment selling, when their short-term view becomes negative.

Nifty 50 - Index Daily Chart

The Daily chart describes the selling from the last three days as heavy with strong volumes in the cash segment, which makes the market sentiment weak for the coming days. Fed's hawkish statement makes the market jittery, as they confirmed that there is no respite in rate hikes in the year 2023 also.

Generally, this is the time when investors start thinking to change their investment strategies on a long-term basis.

The outlook for the Upcoming week starts on 19th December-2022

As we mentioned in the previous technical journal that this week would be the most volatile week, and that happened. Now for the coming weeks, we do not have any major events left, which can make markets move one side trendy.

Now the major event for the Indian market is the last budget before the Lok sabha elections, by the current government, which could be the last chance for them to prove the development policies are intact in place. (The next budget will be only an interim budget before the election)

The coming week is likely to see the levels of 18480 and 18630 acting as potential resistance points; the supports will come in at 18200 and 18030 levels.

We can not rule out the down move of the Nifty 50- Index towards 18000, which has strong support at 18030.

To break down, this level will open more downside for the index, which will bring structural damage, beyond repair for a long time.

The coming days are also likely to see a lack of leadership from any particular pockets of stocks or sectors.

However, some stock-specific outperformance from PSU Banks, Metals, PSE stocks, etc., cannot be ruled out.

There is still no structural damage on the charts as yet and the markets remain in a trading range.

Profits on either side should be vigilantly protected at all levels.

A cautious outlook is advised for the coming week.

Thanks for reading.

Keep Trading

Stay Invested


Neeraj Bhatia

(Managing Director)

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