Nifty 50: Bearish Trend with Key Support Levels
Overview of the Chart:
The chart represents the daily candlestick pattern for the Nifty 50 index, combined with the following indicators and tools:
ZLMA (Zero Lag Moving Average) for 50 and 100 periods.
Fibonacci Retracement Levels drawn from the most recent high to low.
RSI (Relative Strength Index) to measure momentum and overbought/oversold conditions.
MACD (Moving Average Convergence Divergence) to analyze momentum and trend direction.
ZLMA (Zero Lag Moving Averages):
50 ZLMA (Black Line): This represents the short-term trend. The index is currently trading below this moving average, indicating bearish momentum in the short term.
100 ZLMA (Blue Line): This acts as a long-term trend indicator. The index is also below this level, signaling a weakening trend in the medium to long term.
The convergence of these two ZLMAs suggests a key resistance zone around the 24,000–24,150 range. Until the price breaks above these levels, the overall bias remains bearish.
Fibonacci Retracement Analysis:
The Fibonacci retracement levels are drawn between the recent swing high of 26,282.35 and swing low of 21,296.50. Key levels:
23.6% Retracement (25,105.70): This acted as resistance during earlier retracements and failed to hold.
38.2% Retracement (24,377.75): Another resistance level where the price struggled and has recently broken down.
50% Retracement (23,789.40): The index is now below this level, which may act as immediate resistance.
61.8% Retracement (23,201.10): The current level is hovering close to this support. If breached, the next target would be the 78.6% retracement (22,363.45).
The inability to reclaim higher Fibonacci levels reinforces the bearish trend.
RSI (Relative Strength Index):
Current RSI: 35.05, below the neutral level of 50.
The RSI is nearing the oversold region (below 30), which might indicate a potential bounce. However, this is not confirmed yet, as momentum remains weak.
Previous RSI divergence patterns do not suggest immediate reversal signals.
MACD (Moving Average Convergence Divergence):
MACD Line (-173.87) is well below the signal line (-235.40), confirming the bearish momentum.
The histogram bars remain negative, showing no signs of reversal yet.
The MACD's placement suggests that the bearish phase is intact and any uptrend might be corrective.
Volume Analysis:
The volume appears consistent but does not show any significant spikes. This suggests a lack of strong buyer interest at the current levels.
Declining volume during pullbacks indicates weak bullish attempts.
Current Levels to Watch:
Support Levels: 23,201.10 (61.8% Fibonacci) and 22,363.45 (78.6% Fibonacci).
Resistance Levels: 23,789.40 (50% Fibonacci), followed by 24,150 (near the ZLMA 50 and 100).
Conclusion:
The Nifty 50 index is in a bearish phase, trading below its key moving averages and important Fibonacci levels. The RSI and MACD confirm the negative sentiment. However, the proximity to the 61.8% Fibonacci retracement level and oversold RSI suggests that there might be a short-term bounce, especially if 23,201.10 holds as support. A failure to hold this level would open the doors for a deeper correction towards 22,363.45.
Traders should closely watch volume and price action near these support and resistance levels to further confirmation of trend direction.
Note:
Studies are for educational purposes only.
We will not be responsible for any of your Profits & Losses.
Please trade with a proper risk management strategy to avoid huge capital loss.
The chart represents the daily candlestick pattern for the Nifty 50 index, combined with the following indicators and tools:
ZLMA (Zero Lag Moving Average) for 50 and 100 periods.
Fibonacci Retracement Levels drawn from the most recent high to low.
RSI (Relative Strength Index) to measure momentum and overbought/oversold conditions.
MACD (Moving Average Convergence Divergence) to analyze momentum and trend direction.
ZLMA (Zero Lag Moving Averages):
50 ZLMA (Black Line): This represents the short-term trend. The index is currently trading below this moving average, indicating bearish momentum in the short term.
100 ZLMA (Blue Line): This acts as a long-term trend indicator. The index is also below this level, signaling a weakening trend in the medium to long term.
The convergence of these two ZLMAs suggests a key resistance zone around the 24,000–24,150 range. Until the price breaks above these levels, the overall bias remains bearish.
Fibonacci Retracement Analysis:
The Fibonacci retracement levels are drawn between the recent swing high of 26,282.35 and swing low of 21,296.50. Key levels:
23.6% Retracement (25,105.70): This acted as resistance during earlier retracements and failed to hold.
38.2% Retracement (24,377.75): Another resistance level where the price struggled and has recently broken down.
50% Retracement (23,789.40): The index is now below this level, which may act as immediate resistance.
61.8% Retracement (23,201.10): The current level is hovering close to this support. If breached, the next target would be the 78.6% retracement (22,363.45).
The inability to reclaim higher Fibonacci levels reinforces the bearish trend.
RSI (Relative Strength Index):
Current RSI: 35.05, below the neutral level of 50.
The RSI is nearing the oversold region (below 30), which might indicate a potential bounce. However, this is not confirmed yet, as momentum remains weak.
Previous RSI divergence patterns do not suggest immediate reversal signals.
MACD (Moving Average Convergence Divergence):
MACD Line (-173.87) is well below the signal line (-235.40), confirming the bearish momentum.
The histogram bars remain negative, showing no signs of reversal yet.
The MACD's placement suggests that the bearish phase is intact and any uptrend might be corrective.
Volume Analysis:
The volume appears consistent but does not show any significant spikes. This suggests a lack of strong buyer interest at the current levels.
Declining volume during pullbacks indicates weak bullish attempts.
Current Levels to Watch:
Support Levels: 23,201.10 (61.8% Fibonacci) and 22,363.45 (78.6% Fibonacci).
Resistance Levels: 23,789.40 (50% Fibonacci), followed by 24,150 (near the ZLMA 50 and 100).
Conclusion:
The Nifty 50 index is in a bearish phase, trading below its key moving averages and important Fibonacci levels. The RSI and MACD confirm the negative sentiment. However, the proximity to the 61.8% Fibonacci retracement level and oversold RSI suggests that there might be a short-term bounce, especially if 23,201.10 holds as support. A failure to hold this level would open the doors for a deeper correction towards 22,363.45.
Traders should closely watch volume and price action near these support and resistance levels to further confirmation of trend direction.
Note:
Studies are for educational purposes only.
We will not be responsible for any of your Profits & Losses.
Please trade with a proper risk management strategy to avoid huge capital loss.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.