The relentless rally in the broader market index is catching the attention of investors. The index which made a low of 18,837 on 26 October 2023 has made a high of 19875 today. That’s more than a 1,000-point move in a mere 15 trading sessions.

In the midst of heightened geopolitical tensions, nobody had expected such as strong investors’ interest, however, the funds coming in the market from retail investors, especially through SIPs have now started to make an impact. The recent lower-than-expected US retail inflation of 2.3% in October 2023 had further fueled the rally.

The short-term trend is positive and there’s no weakness seen on the chart yet. In fact, today’s strong rally has further strengthened the upside move. However, before reaching a new all-time high, the index has to face its last hurdle, which is at 19,850.

Image Description: Daily chart of Nifty 50 (spot)

Image Source: Investing.com

This is the level that reversed the prior uptrend of the index back in mid-October 2023, after which Nifty 50 marked a new low of H2 CY23. The same level has again acted as a strong selling zone and posed as a hurdle in today’s session.

The high made was 19,875, but a 110-point lower closing indicates profit booking, which is justified after such a stretched move.

Traders can stick to the buy-on-dip strategy instead of trying to catch a peak. There is a decent gap being left on the chart after yesterday’s gap-up opening which could be filled in case of a retracement. However, that could be a good buying opportunity before the market resumes its trend on the upside.

As the resistance is clearly witnessed, those trying to fade the rally should maintain a very strict stop loss above today’s high and the support where the gap would be filled can be deemed as a level to cover short positions.

If this hurdle gets passed, then we can see a new high in Nifty 50.

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X (formerly, Twitter) – aayushxkhanna

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