Market Update

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Nifty trades higher near 23,750 today, after achieving the mentioned target of 23,600 on Tuesday. The path from here is not easy as the current trend pattern suggests Nifty may face resistance at 23,750–23,850 levels, making it ideal for taking contra-short bets. While a possibility of a broader counter-trend rally up to 24,000 levels cannot be ruled out, it may remain short-lived.

This means taking a bet on either side comes with risk and a 50-50 probability favouring luck. Technically, a breach below 23,600 or the previous hour's low may initiate profit booking from buyers who bought on the dip, while simultaneously triggering selling from long-term investors who assess the war in West Asia to be prolonged, looking at recent developments.

Intraday traders may take a long bet with support at 23,650, while a contra-short bet near 23,800–23,850 with a stop at 23,900–23,920 may work. In our previous report, we clearly mentioned that the interim period may see mild or no activity on the war front as both parties restock and reinforce their military.

Until a conclusion is reached, the Strait of Hormuz remains a choking point for energy shipments, and we must accept the fact that no one can replace the disrupted supply — not America, nor Russia.

A reversal from 23850 level may provide short opportunity in Nifty for the target of 23400, 23000-22800, with a stoploss of 24060.

Read full of Analysis of Nifty50 here for broader view.

Tradzo maintains cautious view due to global macro-economic scenarios and advice to reduce weak long positions due to valuation concerns and downside risks.