- The Nifty 50 has gone back and forth during the trading session on Wednesday as we continue to see a lot of noisy behavior.
- Ultimately, this is a market that I think is going to probably outperform most others, because although it underperformed during the Thursday session, the reality is that the Nifty 50 has been a much better performer than most of the other indices around the world so suffice to say, it could make sense that we would see it turn around and go higher given enough time.
Furthermore, we have seen a significant amount of support right around the 17,800 level, and even though we did drop during the day a bit on Wednesday, the area has held again. If we can get back above the 50-Day EMA, it’s likely that the market will try to rally toward the 18,400 level. Above there, the market starts to take off and it continues the overall uptrend. I do believe that given enough time, this market could go looking to the 20,000 level, but you should also keep in mind that the market has seen quite a bit of volatility as of late, so we may have to hang out and work off some of this froth.
I Will Likely Start with a Small Position
If we break down below the support level, then it’s likely that we could go down to the 200-Day EMA, sitting right around the 17,600 level. That’s an area that will attract a lot of attention due to the 200-Day EMA, and the fact that it tends to define the longer-term trend. Regardless, I think you do have a lot of noisy behavior out there just waiting to happen, but the last several months have taught us that the Nifty 50 continues outperform most other indices in general. I think that trend will more likely than not continue unless there’s something fundamentally different going on out there. We are between the 50-Day EMA and the 200-Day EMA indicators, which quite often will form a bit of a pocket of support or resistance.
I will more likely than not start with a small position, and then build up as the trade works out in my favor. After all, we have seen a lot of noisy behavior in most markets, so this could be yet another one that experiences volatility.
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