NIFTY TREND REVERSAL OR CORRECTION ?

 With strong gains of 42% and 49% on a year-to-date basis, respectively  the Nifty midcap and smallcap indices currently trade at a 25% premium to their long-term averages, suggesting possible valuation issues.

 The country's expected high November inflation, fueled by rising food costs, caused the Nifty50 to go into a stabilization phase on Tuesday after its recent strong surge. 

This might likely postpone RBI policy cutbacks. On the other hand, the US inflation outlook is still stable, which may have an impact on the US Fed's future policy

On the daily chart, Nifty has created a bearish engulfing pattern that raises the probability of a bearish reversal. Call writers have established a strong position at 21,000 on the upper end. Put writers are highly prevalent at 20,800 and 20,900 on the lower end.


Therefore, as long as it stays below 21,000, Nifty is anticipated to be primarily sideways to negative. A strong move above 21,000 would be necessary to start the uptrend again. 20,800 is a level of support below which more consolidation of the index is possible."

Disclaimer: 

This article is my personal opinion and is only for educational purposes. Please consult your financial advisor before making any decision. Stock Market investments are subject to market risk. Please read the offer documents carefully before investing. 

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