Nifty 50 trading near its three -week low with all major areas ending in the negative area. The index is showing 21-day and 55-day moving averages showing weakness and trading symptoms. The MACD indicator has become negative, and the MACD line has crossed the signal line suggests a recession tendency. Additionally, the Nifty is trading below with horizontal support which is 23,350, which may be likely to act as a strong resistance level. A sales-on-growth approach is preferred until it remains above 23,350. The main support is placed on a violation of 22,800-22750 that can lead it to 22,500, and further negative can move it up to 22,000, a major support level is aligning with a 100-week EMA.
Bank Nifty closed in red this week, fell 2.11% and created a negative candle on the weekly chart. Prices are trading below 21-day and 55-day EMA, indicating weakness. Strong resistance is at 49,650, and a breakout above this level can push it towards 50,200. On the negative side, the support is at 48,700, low this week, and the breakdown below it may increase the sale pressure towards 48,000. The overall market tone appears as a recession, until a clear breakout suggests a sell-up approach. Traders should further view the level of support and resistance to the direction of the market further.
Technically, many of January low -low retracts in 22,800 have weakened its importance, which has further increased the possibility of negative. The next major support levels are now seen in the 22,100-22,500 range. In the event of a reversal, the first major barrier stands at the 20-day exponential moving average of 23,350, followed by resistance at 23,600.
Amidst the prevailing pessimism, the relative strength of the two major regions – banking and it – has helped reduce widespread decline. Traders should closely monitor their performance to signs of a possible directional change. Meanwhile, despite the oversold conditions, we maintain a cautious approach on broad indices and advise against the bottom fishing or average the positions on losing positions.
