Market Update
Harsh Patel
Founder
Nifty's higher opening to 26100, indicating buy reversal from 26000 on hourly chart got nullified in the 1st hour, support seen at 26000-25980. Silver rally reaches $80 mark in the global market.
Nifty Hourly Chart
Support levels: 26000 Resistance levels: 26100-26200
Lackluster trading activity to continues, on the Nifty after seeing breakdown attempts failing below 25800 levels, Nifty is failing to make new high after facing rejection from 26200. Interestingly reversal signal also go nullified today as selling the market has intensified in some front line stocks, while buying spree continues in some baskets.
This mix stock specific behavior is making trading signals on Nifty chart unreliable and subject to trap as we witnessed in the 1st hour of trading, support for Nifty is seen at 25980. While moves in precious metals keeps raising concerns over global uncertainty and overvalued equities.
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RSI is an indicator that shows strength of trend and is often used to check if stock is oversold or overbought in general, this works as a fantastic contra indicator universally. We have taken yearly RSI to find the underlying tone of the market.
Study suggests that on the long term charts stocks in the Nifty 200 universe are skewed to overbought levels, majority of the overbought stocks in this basket in 2024 and in 2019 corrected by 35%-60%, which warns caution ahead for these stocks, also there are no stocks in oversold category which is generally the case in overvalued bull market.
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