Nifty-50: Is the fall over or will it crash further?

Friday - March 23, 2018: Nifty-50, the benchmark index, opened nearly 150 points down owing to troubled geo-political situation and was followed by a rather depressing trading session as the index showed no major recovery, before it ended the day with 116 points on the downside. Investors may have lost a lot of money, but they definitely haven’t lost interest in the market as they are eagerly looking forward to know if the fall in Nifty if over or it may continue further.

Read along if you want to know the answer….

· Nifty took support near the lower line of the channel which was placed @ 9950 and bounced back to form a green candle. Prior to this, Nifty had honored the same channel support level twice and given a small correction of upto 200-250 points from the support.

· Nifty has fallen out of the Bollinger Band and is facing resistance of the Lower Bollinger Line. Historical data has shown that Nifty has a tendency of bouncing back into the band and does not tend to stay out of the band for long.

· Every time when the RSI has gone below 35 and has shown an upward spike, Nifty has shown a pullback. This pullback may be not very severe as the overall trend still remains.

· MACD Histogram is has shown divergence by forming higher-high higher-low.

All the above points put together, it can be concluded that we may see a small bounce-back of nearly 200 from the current levels. The weekly chart of Nifty presents a similar kind of view where the prices are taking a support of the Lower Bollinger Line. However, this will be confirmed only if Nifty breaks above the previous day high of 10027.7 and manages to hold there for at least an hour or more. A break below 9900 will trigger a panic selloff in the market which may take Nifty down towards the levels of 9700.

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