- The Nifty 50 has rallied a bit during the training session on Monday, reaching the 50-Day EMA.
- The 50-Day EMA being broken to the outside allows for the possibility of a move to the ₹18,250 level, which is an area where we’ve seen a little bit of noise in the past.
- I do think that we get there eventually, and it is probably worth noting that we have formed a little bit of a minor or double bottom underneath the ₹18,000 level, an area that obviously has a large amount of psychology attached to it and has been important in the past.
The market breaking above the ₹18,250 level does open up the possibility of a move to the ₹18,800 level, which was the recent highs, therefore it does make a significant target and more likely than not going to end up offering a significant amount of resistance as well. Anything above there is a bonus, and then it opens up the possibility of reaching towards the ₹20,000 level. The ₹20,000 level would be a large area to watch, and I think would attract a lot of attention in general. The headline noise could cause that to be very difficult to break above, but if we clear the ₹20,000 level, then it’s difficult to imagine where we could end up.
I Remain Bullish
On the other hand, if we turn around and break down below the little double bottom that we just made, that opens up the possibility of the Nifty 50 going down to the 200-Day EMA, which is an area that will attract a lot of attention near the ₹17,500 level. Anything below there would of course be very bearish, but I just don’t see where we have that move happen.
Obviously, it would be a very huge “risk-off move” which is possible, but it’s also worth noting that the Indian stock market itself has outperformed many other indices, so even if we do see a lot of risk appetite destroyed out there, it’s very possible that the Nifty 50 won’t fall as far as the rest or could even move in the exact opposite direction. With that being the case, I remain bullish on the Nifty 50 while I don’t like many of the other indices around the world. For that matter, it sets up for a nice pairs trade.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex brokers to check out.