NIFTY 50 Weekly Chart Technical Analysis

Technical Analysis of NIFTY 50 Weekly Chart
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1. Chart Overview
• The chart represents the NIFTY 50 Index on a weekly timeframe.
• A significant downtrend is visible after reaching a recent high near 26,277.
• The index is trading around 22,124, close to an identified support level.
• The chart includes volume bars, MACD, and RSI indicators to analyze trend strength and momentum.
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2. Key Chart Features and Pattern Observations
• Support & Resistance Levels:
o Resistance: ~26,277 (marked in purple).
o Support: ~21,281 (marked in blue), with a lower potential support around 18,837.
• Price Action:
o The market recently made a lower high, signaling weakness.
o A series of red candles indicates strong selling pressure.
o The price is approaching a crucial support zone, where a potential bounce might occur.
• Trend:
o The primary trend is bearish, as seen from the continuous red candles.
o The recent downtrend has been accompanied by increased selling volume.
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3. Indicator Analysis
Volume:
• Volume has increased on the recent red candles, confirming strong selling pressure.
• A decrease in volume near support could indicate exhaustion of selling.
MACD (Moving Average Convergence Divergence):
• The MACD line (red) is below the signal line (blue), indicating bearish momentum.
• The histogram is showing negative bars, confirming a downtrend.
• No signs of a bullish crossover yet.
RSI (Relative Strength Index):
• RSI is currently at 36.28, near the oversold zone (30).
• If RSI drops below 30, it could indicate an extreme oversold condition, signaling a possible reversal.
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4. Key Levels or Price Levels
• Resistance Levels:
o 26,277 – Major resistance from the recent high.
o 23,500 - 24,000 – Possible minor resistance if a rebound occurs.
• Support Levels:
o 21,281 – Immediate support, if broken, may lead to further downside.
o 18,837 – Stronger support level, last major swing low.
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5. Overall Summary
• Bearish Trend: Price action, MACD, and RSI confirm a downward trend.
• Support Test: The market is near a critical support at 21,281.
• Oversold Conditions Approaching: RSI is nearing oversold levels, suggesting a potential bounce.
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6. Trading Strategy
Bearish Scenario (Short Selling)
• If 21,281 breaks, a short trade can be taken with targets of 20,500 - 19,000.
• Stop-loss: Above 22,500.
Bullish Scenario (Buy on Reversal)
• If the price shows support of around 21,281, a long trade can be considered.
• Confirmation: Bullish candlestick pattern or RSI divergence.
• Target: 23,500 - 24,000.
• Stop-loss: Below 21,000.
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7. Conclusion
• NIFTY is in a strong bearish trend, and price action indicates further downside unless support at 21,281 holds.
• Key decision area: If price holds at support, a bounce may occur. If broken, expect further downside.
• Traders should watch for confirmation signals like bullish candlestick formations, RSI divergence, or volume decrease to gauge potential reversals.