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Nifty 50 Breaks Range; Finally ‘Confirms’ Up Trend!

Published 31-03-2023, 10:05 am
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Many traders might have gotten frustrated by now as the benchmark Nifty 50 index was going nowhere for the last 15 days. Although it was a great time for option sellers, directional players had a really tough time. But today’s session seems to be bringing some hope to these directional traders as the Nifty 50 has finally surged past its key resistance level of the last-15-day range.

As mentioned several times in my previous analyses, the resistance of 17,200 - 17,225 needed to be watched out for in case traders want to bet on the uptrend. The consolidation phase that had been going on since mid-March 2023 amid a downtrend was also an indication of demand starting to overpower supply.

Image Description: Daily chart of Nifty 50 (spot)

Image Source: Investing.com

At the opening tick, the index crossed this hurdle and is currently trading 1.19% or 205 points up at 17,285, by 9:43 AM IST. Now, what should be done?

Firstly, bearish positions should be squared off as the trend is clearly been establishing on the upside. Also, due to the oversold status of Nifty, the rally could stretch a bit which might lead to trouble for bears.

The range from which Nifty 50 is coming out is around 350 points in height. In technical parlance, the nearest target which can be expected after security breaks a range is the height of the range added to the breakout level. In the case of Nifty 50, this targeting mechanism is helping to gauge a rough target of 17,550 (spot). This is the level bulls should eye for.

So all in all, traders should start turning bullish on the index, after a long time. From here on, the level of 16,825 - 16,850 becomes good support. As long as this is not taken out, the market should be deemed to have been turned into buy-on-dip.

Read More: Rising Channel Breakdown: This F&O Laggard is Luring Bears!

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