Nifty: Two Scenarios

Bravetotrade Mod Updated   
NSE:NIFTY   Nifty 50 Index
Notes on the chart.
Its been a while since i wrote on Nifty. In my previous post I mentioned that above 10650 level we might changed our stance from bearish to bullish. This week it had two closings above that level which also coincides with the 61.8% retracement of the bearish move that the index in Feb and March. The correction later in the last week is a sign that the 10650-10700 zone has been acting as a supply zone.

So where are we heading now?
I would discuss two short term scenarios here, which might work in a week or two.

1. Secnario one: the index has an approx. 670 point rally in one stretch. It needs to correct and consolidate for a sound uptrend to resume. I expect a bare minimum 38.2% retracement, which is at 10527. Also 20 EMA is at 10555, as of today. So I may say that the 10527-10550 zone should act as support in this downmove. From this level we may see a sharp upmove for 11000-11100 levels.

2. Scenario two: The second observation is that we have already corrected a lot and there have been divergences on several indicators on short term charts, suggesting a correction on upside. In this case we might retest 10650-10700 levels first before we resume downtrend towards 10527-10555 zone. The rest of the story would be the same as that of scenario one.

Plz consider this as an analysis, not a forecast.
The level 10785 has some supply and has evolved as a resistance. A close below 10680 may take nifty down to 10500-10550 level.
We need a break and close above 10785 for the uptrend to resume. The immediate target will be 11000.
Enjoy 👍

JJ Singh
Moderator, TradingView

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