Why Am I long In Nifty ?
After giving a rally of almost 140% nifty is in a rangebound market from almost 1 year, which means it is going through accumulation or distribution phase. If it is distribution then market will move downwards and can test level of 13600 but if we consider it is an accumulation phase then it can give a rally up to 21000 in coming months.
I have mentioned below my reasons why I am considering more probability of this rangebound as an accumulation than distribution.
1. Strong Sectoral chart : Many sectors like auto, energy and banking are looking very strong on chart and even weak sectors like IT and Metal are showing some strength.
2. Sign of Strength in Global Market : In weekly chart S&P 500 Chart is near its 200 EMA and at same time in daily timeframe it is forming reverse head and shoulder pattern(still to give breakout).
3. Price action : For Cup and Handle I personally use some combination of RSI signals to identify a strong Cup & handle. Nifty is forming a cup & handle pattern in weekly chart from Apr'22 and for the handle to be completed 17400 was a very important resistance level, last week market has given a closing above 17400 and RSI is also indicating some strength.
Thanks!
I have mentioned below my reasons why I am considering more probability of this rangebound as an accumulation than distribution.
1. Strong Sectoral chart : Many sectors like auto, energy and banking are looking very strong on chart and even weak sectors like IT and Metal are showing some strength.
2. Sign of Strength in Global Market : In weekly chart S&P 500 Chart is near its 200 EMA and at same time in daily timeframe it is forming reverse head and shoulder pattern(still to give breakout).
3. Price action : For Cup and Handle I personally use some combination of RSI signals to identify a strong Cup & handle. Nifty is forming a cup & handle pattern in weekly chart from Apr'22 and for the handle to be completed 17400 was a very important resistance level, last week market has given a closing above 17400 and RSI is also indicating some strength.
Thanks!
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