- The Nifty 50 has fallen hard during the trading session on Thursday but still remains in the same rectangle that we have been in for a while.
- Because of this, I am looking to see if this sets up some type of buying opportunity. After all, the Nifty 50 has been outperforming most other indices around the world, so it does make a certain amount of sense that it would continue to lead the charge. If we can take out the ₹18,000 level to the upside, that opens up the possibility of a move to the ₹18,200 level.
- Furthermore, it would also have this market breaking above the 50-Day EMA, which of course is bullish in and of itself.
If we do break down below the recent lows, then the next major support area is going to be right around the 200-Day EMA, presently camping around the ₹17,600 level. It has been rising, and it’s worth noting that it offered a significant amount of support previously. The markets have obviously paid attention to the 200-Day EMA a few times in the past recently, so I think that is something worth keeping an eye on. Ultimately, I think this is a situation where you will eventually see some type of significant move one way or the other, and it will probably hang around and move with the other indices around the world. In other words, if we get a major “risk on move” globally, that should only help the Nifty 50.
Market Trying to Find a Reason to get to the ₹20,000 Level
If we do break out to the upside, then I would go looking to the ₹18,800 level, which was the recent high. That of course could get people excited, and we could blow through there to finally go to the ₹20,000 level, an area that I think the market is trying to find a reason to get to that ₹20,000 level, as it is such a large, round, psychologically significant figure.
That being said, if we were to break down from here then I think the ₹16,800 level would be a target worth paying attention to, as it was the scene of a major swing below that bounced off of the previously mentioned 200-Day EMA. Anything below there would have the market really fallen apart, perhaps reaching down to the ₹16,000 level.
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