The NIFTY’s Descent: A Tale of Timing and Technicals
https://ganninsides.com/2024/12/18/nifty-index-breach-of-support-raises-breakdown-concerns/
“NIFTY experienced a significant breakdown below its critical support of 24,200 on spot on Wednesday. As discussed in the post shared above, the initial target of this major breakdown was projected at 23,800, which the index achieved quite easily.”
The past week witnessed a confluence of three significant time cycle dates – 17th, 19th, and 20th December – culminating in one of the most bearish weeks for Indian markets in the last two years. This bearish sentiment was reflected in the NIFTY’s volatile trading, with a weekly range exceeding 1200 points from Monday to Friday.”
“I have been anticipating this market decline for several days. The current downturn is unfolding as expected, both in terms of timing and severity. As previously mentioned, this leg lower is likely to be more impactful and potentially more dangerous than the declines witnessed in October and the first half of November. However, this major downtrend will likely unfold in phases, meaning that the market won’t decline consistently every day. Therefore, it’s crucial for traders to capitalize on any rallies that emerge to initiate fresh short positions.”
On PRICE FRONT
The NIFTY is likely to encounter resistance in the zone between 23,900 and 24,300 on spot. This range may act as a significant hurdle for any upward momentum in the index.”
On TIME FRONT
“The convergence of two significant time cycle dates next week, December 26th and 27th, is likely to heighten market volatility. Traders should anticipate wider intraday swings and increased price fluctuations during this period.”
“Broadly, I am expecting the NIFTY to drop significantly in the coming weeks and months. However, for the next few days, I would expect the NIFTY to take a breather first. Then, I anticipate a lower low below its November low of 23,263. Finally, it may break its 45-degree angle support of 23,100, which has been calculated from its September high. This would be its second attempt to break this support. And this time, I would expect the NIFTY to finally break through, opening up a genuine possibility for a drop towards its 90-degree angle support, which comes significantly lower. Let’s not discuss that for now.”
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