GIFT Nifty 50 Index Futures – Retracement in Progress

The GIFT Nifty 50 Index Futures chart shows a clear uptrend, with recent price action facing a corrective pullback after a strong rally. The price is currently approaching key Fibonacci retracement levels, offering a potential buying opportunity within the ascending channel.

1. Technical Insights:
2. Ascending Channel:
3. The index has been moving in a well-defined upward channel since June 2024. The current retracement is testing the middle of this channel, which could provide support near the 38.2% Fibonacci retracement level at 25,039.
   
5. Fibonacci Retracement:
   
6. The price has retraced from its recent high of 25,828 and is testing the 38.2% retracement level at 25,039. If this level holds, we can expect the price to bounce back towards the upper channel resistance around 26,500.
   A deeper retracement could test the 50% level at 24,314 or the 61.8% level at 23,590, which align with the lower boundary of the channel.
   
8. Support and Resistance:
9. Support Levels: The immediate support lies at 25,039 (38.2% Fibonacci), followed by 24,314 (50% Fibonacci) and 23,590 (61.8% Fibonacci).
   
10. Resistance Levels: Immediate resistance stands at 25,828 (recent high), followed by the upper channel boundary around 26,500.
    
12. Volume Analysis:
13. Volume has spiked during this retracement, indicating that selling pressure is being absorbed. However, sustained buying interest is crucial to confirm any bounce from current levels.
    
15. RSI (Relative Strength Index):
16. • The RSI has pulled back from overbought levels and is currently near the 50 mark, suggesting neutral momentum. A drop below 40 could indicate further downside, while a move above 60 would confirm a renewed uptrend.
      

Outlook:

• Bullish Scenario: If the index finds support near 25,039, we could see a rebound back towards the upper channel, with potential targets at 26,000 and 26,500.
  
• Bearish Scenario: A failure to hold the 38.2% Fibonacci level could lead to further downside, with the next support levels at 24,314 (50% retracement) and 23,590 (61.8% retracement).
  

The overall uptrend remains intact, but caution is advised as the index tests key support levels. Traders can look for confirmation of a bounce before entering long positions.