A Look at the Technical Indicators of Nifty Futures

India’s benchmark stock index Nifty (NSEI) closed around 17780.00 Wednesday, jumped almost +678 points (+3.92%) in the last three trading days on the ‘no harm’ budget. Although the FY23 budget may not be called a blockbuster, the fact that there was no tinkering with Long Term Capital Gain Tax (LTCGT) as was being feared by the market. This, along with fiscal prudence, substantially higher capex/infra stimulus, targeted structural reform and no big bang populism (for poll-bound five states) boosted the risk-on sentiment and the Nifty jumped.

Technically, Nifty 50 Futures made a bullish engulfing pattern (bullish reversal) and made further continuation (piercing pattern); if we look at the last Fibonacci sequence, Nifty Futures took support around 16839.00 levels, which was 78.6% retracement levels (like an ideal TA textbook) and gain further momentum above 50% retracement levels (17390).

Now looking ahead, whatever may be the narrative, time & price action suggests Nifty Future has to sustain over 17925-18000 levels for 18360-18405 and only sustaining above 18405, Nifty Future may again scale lifetime high around 18600.

If we consider Elliot Wave (EW) analysis, Nifty Futures may now be in extended B-wave (1-2-3-4-5 and A-B-C). This along with the Fibonacci sequence indicates 17600 now as vital support for the Nifty Futures. If Nifty futures sustains over 17600 zones, it will hit 17900-18000, and further sustaining above 18000, it may scale 18360-18405 and even 18600 in the coming days. On the flip side, if Nifty Futures fails to sustain over 17900 for any reason, it will slip to 17600 and sustain below that, may further slip to 17390/17150-17000/16800 and even 16425 zones in the coming days.

TTM Squeeze momentum indicator shows Nifty Futures should scale at least 18000 levels before any retracements. If there is any retracement, and subsequent consolidation/distribution, Nifty Futures may test 17600-390 levels under EW-C (correction).