Nifty Market Update: Bears Are in Control – A Rough Ride Ahead?

The Nifty closed at 22,795 this week, down by 134 points from the previous week’s close, with a high of 23,049 and a low of 22,720. The formation of a Gravestone Doji candle indicates that the market is firmly under the control of the bears, signaling potential weakness ahead. As forecasted last week, Nifty moved within the range of 23,450 to 22,400, aligning perfectly with my predictions.

Looking ahead to next week, I expect Nifty to trade between the 23,300 to 22,250 range. While 22,300-22,400 offers a strong support zone, if the index slips below 22,250, it could test the WEMA100 at 22,050, which could offer some relief.

Digging deeper, I analyzed the Nifty50 monthly chart from 2004 onwards and noticed a recurring pattern: whenever Nifty closes below the monthly EMA21, it tends to test the EMA50, which currently stands at 19,450. If this month’s close is below 22,400, we could be heading toward 19,450, so brace yourselves for what could be a bumpy ride ahead.

On the international front, the S&P 500 is showing signs of forming a bearish M-pattern, a negative signal for the broader market. This is troubling news for Indian markets, which are already under pressure. From the current level of 6,013, a 1.5% correction could see the index testing support levels around 5,900.

The battle between bears and bulls continues, but for now, I believe the bears still have the upper hand. Stay cautious and keep a close watch on market movements – volatility is here to stay!