NIFTY50 - DON'T MISTAKE THIS RALLY FOR A TREND REVERSAL

Mar 23

Symbol - NIFTY50

CMP - 23350.40

The Nifty50 is still trading within a bearish technical structure. As of now, the index is currently trading at 23350 after a strong up move. Given the ongoing downtrend and resistance levels, there is a strong possibility that Nifty may experience a pullback from these levels.

I had shared a trading idea on Nifty50 when it was trading around the 21900-22100 levels, stating that a retracement on the long side was due and that it could easily touch the 22800-23000 levels. Nifty gave a strong up move from those levels, and both targets have been reached.

Upon closer inspection of the Nifty chart, it is evident that the index is still in a downtrend, making lower lows since the beginning of its fall. We witnessed a sharp rally from the 21800-22000 zone, which is common in a bear market. Such sharp rallies are often misinterpreted as trend reversals, but in reality, the faster these rallies come, the quicker they tend to get sold.

The bearish structure remains intact and has not been broken. For now, Nifty still appears to be a sell on rise. For those following the trend, the 23300-23600 zone is the ideal range to go short, as this area aligns with a strong resistance zone and the formation of another swing high.

At this point, it seems likely that the market may consolidate between the 23300-23600 zone before showing a sharp down move. If the market does reverse its trend, we can only consider that possibility after a breakout above the 24000 zone, which would be a key signal for a trend shift.

Mar 24

Trade active

CMP 23500

Short positions initiated.

Mar 24

Note

CMP 23700

Added more quantity here, Avg sell price now is 23600

Apr 1

Note

CMP 23200

Future short position +400 points in profit now. Holding with cost SL.

Apr 4

Trade closed: target reached

CMP 23050

First target has been reached.
Short position +550 in profit.

Apr 7

Note

Nifty50 opened gap down & touched 21750

All targets reached.