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The index has started the day on a bad note, all thanks to negative global cues. As of 9:37 AM IST, the index is down 153 points to 19,517 with only 6 of its constituents trading in the green zone. The tensions in the Middle East on account of the Israel-Palestine war are still sending jitters and keeping investors in risk-averse mode.
Continuing from yesterday’s fall, the index is now approaching its support level of 19,480 which is the previous swing low marked on 9 October 2023. The low two days prior to this date was 19,487, hence I would consider this area to be a good demand zone.
Image Description: Daily chart of Nifty 50 (spot)
Image Source: Investing.com
There is no clear trend on the larger time frame and the index is just bouncing off between its support and resistance and this is another reason some demand could kick in around 19,480.
If the index slides below this support, then the next level to watch out for is 19,333. This is the low of the trend reversal day in Nifty 50 on 4 October 2023. The Hammer-like reversal candle on this day worked quite well to halt the previous downtrend and reverse the course towards the north. Hence, this level is the most crucial one and a break below this might lead to an extended selling pressure.
To conclude, this is not a market for trend followers and doing so could lead to many whipsaws. Rather, buying the dip and selling the rallies is working quite well in this range-bound market. Hence, going short on lower levels and long on higher levels should be avoided.
Disclosure: I have multiple positions in Nifty 50 options
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X (formerly, Twitter) – aayushxkhanna
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