Nifty 50: Resistance Shifts to 17,800, Downtrend Continues!
The broader market index, witnessed profit booking on the weekly expiry day, losing 0.82% to 17,608, by 3:00 PM IST. The sectoral strength is also looking on the weaker side, with all sectors trading with a cut, except the index which is up 0.31%.
The options chain data pointed out in the previous analyses (link at the bottom) was also indicating the current weekly expiry would likely happen below 17,800. There is still some time for the final closing but the index is quite far from this level and would surely close below it.
Image Description: Daily chart of Nifty 50 (spot)
Image Source: Investing.com
The trend of the broader market is negative despite a sharp rally from the recent bottom of around 17,255.2, marked on 28 February 2023. The primary reason I am still calling it a downtrend is the lower low and lower high formation of the index. As long as this formation does not change, the broader trend should be deemed to be a negative one.
With that being said, the resistance of Nifty 50, which was earlier marked at 18,135 (the previous swing high) has now come down to 17,800, the high made two days back. This lower resistance would now give an earlier indication of the trend change as opposed to the previous one, which is around 550 points away from the CMP.
This is the new swing high that traders new to watch out for to initiate their long positions. On the downside, the support has shifted to 17,250, from 17,350. So, the final range for the index is 17,800 on the upside and 17,250 on the downside. It might trade in the sideways direction, within these levels for some time.
However, the US Initial Jobless claims data is due to be out today which would keenly be watched by market participants as it would likely serve as an important input for the upcoming US Fed’s monetary policy decision. The market is forecasting a reading of 195K, and a higher reading would be negative for the equity markets and positive for the , while a lower reading might propel the market higher. In any case, as long as Nifty 50 is trading below 17,800, it is in a downtrend.
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