Nifty Weekly Chart Analysis

Nifty 50 Weekly Chart Analysis

Based on the chart provided, here's a detailed technical analysis using multiple tools and frameworks:

1. Support and Resistance Levels

  • Support Levels:

    • 23,200–23,300: Immediate key support level, aligning with the recent low.
    • 22,000–22,500: Strong historical support level from previous retracements.
    • 20,000–20,500: Major psychological and structural support level.

  • Resistance Levels:

    • 24,100–24,200: Immediate resistance, observed from recent price rejection.
    • 25,000–25,500: Intermediate resistance based on prior consolidation.
    • 26,500–27,000: All-time high resistance zone.

2. Fibonacci Retracement

Using the major uptrend from the COVID crash low (~7,500 in March 2020) to the peak (~27,000 in 2023):

  • 23.6% Retracement: ~23,000 (currently holding).
  • 38.2% Retracement: ~20,800 (next strong support).
  • 50% Retracement: ~17,250 (major correction level).
  • 61.8% Retracement: ~13,700 (unlikely unless a bear market ensues).

3. Elliott Wave Analysis

  • The chart suggests a completed 5-wave impulse structure:

    • Wave 1: Rally from ~7,500 to ~15,000.
    • Wave 2: Correction to ~12,500.
    • Wave 3: Strong rally to ~25,500.
    • Wave 4: Sideways correction to ~22,000.
    • Wave 5: Final rally to ~27,000.

  • Current Phase: Likely in an ABC corrective wave:

    • Wave A: Drop from ~27,000 to ~23,000.
    • Wave B: Possible retracement towards ~25,000.
    • Wave C: Potential decline to ~22,000 or lower.

4. Gann Angle Analysis

  • Price action suggests a bearish Gann angle unless Nifty 50 breaks above 24,200–24,500.
  • Sustaining above this level could indicate a shift to a bullish angle.

5. Pivot Points

  • Key Weekly Pivot Levels (Close: 23,526.50):
    • Pivot Point (P): ~23,650
    • Resistance 1 (R1): ~24,750
    • Resistance 2 (R2): ~25,500
    • Support 1 (S1): ~22,900
    • Support 2 (S2): ~22,000

6. Trendline Analysis

  • A rising trendline from the March 2020 low (~7,500) connects to current levels (~23,000), indicating strong long-term support.
  • A descending trendline from the recent peak (~27,000) suggests immediate resistance around 24,200–24,500.

Trading Strategies

Short-Term (Swing Trading) Strategy

  1. Bullish Case:

    • Entry: Above 24,200 (if resistance breaks).
    • Target: 25,500 (first target), 27,000 (second target).
    • Stop Loss: Below 23,500.

  2. Bearish Case:

    • Entry: Below 23,000 (if support breaks).
    • Target: 22,000 (first target), 20,800 (second target).
    • Stop Loss: Above 23,500.

Positional Trading Strategy

  1. Wait for Retracement: If the price reaches 24,500–25,000 (Wave B), initiate short positions.
  2. Target: ~22,000 (Wave C completion).
  3. Stop Loss: Above 25,500.

Risk Management

  • Risk no more than 1–2% of your trading capital per trade.
  • Use trailing stops to protect profits in case of reversals.

Summary

  • Key Support Levels: 23,000, 22,000, 20,800.
  • Key Resistance Levels: 24,200, 25,500, 27,000.
  • Nifty 50 appears to be in a corrective phase, with potential for a retracement to 24,200–25,000 before further decline.
  • Watch for breakout or breakdown from these levels to determine the next significant trend.

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