SGX Nifty Jumps Over 17,700; India VIX Closes at 52-Week Low!
Friday’s session was a great one as investors finally got some relief. The benchmark index delivered stellar gains, rallying 1.57% to 17,594.35, closing the week with a 0.74% gain. But it was not only the frontline index that witnessed a huge buying interest. All sectoral indices ended with gains with the index rallying by as much as 5.4%. Yes, that was a one-day gain at the index level!
Such a sharp rebound in the index was a bit surprising, especially considering the fact that Nifty 50 closed below its major support of 17,350 for 2 sessions. However, the broader trend is still a negative one as the index is forming a series of lower lows and lower highs which is a classical representation of a downtrend. As the index was heavily beaten down after mid-February 2023, a bounceback from the current levels might extend to pare some of the losses of that period.
Image Description: Daily chart of Nifty 50 (spot)
Image Source: Investing.com
The has also seen a very sharp decline on Friday as it tanked 6.09% to 12.18, which is the lowest 52-week closing. The last time India VIX closed at these low levels was in July 2021. A low VIX generally indicates a less likelihood of the markets taking a serious dip, however, on the contrary, due to its mean reversion property, traders should also be cautious of the market taking a hit from the higher levels.
As long as Nifty 50 does not cross the previous swing high of 18,135, it would be hard to call out a complete trend reversal toward the upside. Despite a 272-point rally on Friday, this level seems quite far, all thanks to a sharp fall from there in the previous month.
The further jumped by 98 points to 17,730, indicating a gap-up opening on Monday. However, before jumping the gun and going long, traders should also consider that the index has already given around 350 points rally from Thursday’s low (including Monday’s expected opening) which might attract some profit booking.
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