Technical Analysis of Indian Equities by Nooresh

Nifty50– 12800-13000 a Pause or a Top ?

A quick take on Nifty50

  • The last 3 tops have found a top around the green trendline.
  • RSI is finally getting into overbought zone at 70+ could be higher after todays close.
  • 3 gaps already and today could be the 4th. Historically not seen more than 4-5 gaps sustain.
  • Will it be a top or a pause is a guess you need to take. But clearly the risk-reward for Index and Large Cap longs is not favorable.
  • A short trade comes only when we start seeing more reversal but after such a momentum the reversal will not be in a hurry.
  • The only trade which comes up is to focus on midcaps and smallcaps which can play catchup. Even in leading sectors the broader stocks can play catchup ( example an IDFC First Bank or RBL or City Union which have started rallying.

 

Nifty Trendline

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Article by Nooresh Merani

Nooresh has written 2788 articles.

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{ 1 comment… add one }
  • Mehul November 11, 2020, 07:18

    True… Index has been walking on the bands (with multiple runaway gaps) since past 4-5 days without even a single red day. How many times in the past have we seen such a scenario and Index not retracing back to 20 DMA. Yeah, this time the difference could be that index has broken out to ATH which could act as support (though weekly & monthly closings are still awaited for more confirmation).

    Reply

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