Market Update
Harsh Patel
Founder
The Nifty set to open higher to 24300 levels, as oil price show sharp decline from $120 to $87/bbl amid Trump's statement- 'Iran war is almost over'. Is it over or just dead cat bounce?
Nifty Daily Chart
Nifty fell 3% to 23750 and gradually recovered to 24000 level on monday, Today market is opening 1% higher, likely filling the gap amid oversold levels and Trump’s statement which are passing statement in nature, in other statement Trump also said that war is far from over and same was the response from Iran, but as of now what we are seeing in media is what majority want to hear.
From analytical lens, we see this bounce as a dead cat bounce & technical in nature, however we must not ignore the expiry factor 24300-24400 is supply zone and provides a contra short opportunity for the target of 23500.
Unless 24900 breach on the higher side, we do not see any risk to technical bearish setup for overall target of 22000.
It is now evident that gas shortage is affecting the industries, which will reflect in the economy and the stock market soon, though we believe there is no need to panic and this just a market cycle that goes through demand driven inflation followed by a supply shock exactly when demands has started to slow down, forcing consumers to pay higher prices in fear of scarcity.
This a classic Recipe of Recession, though India has diverse economy and it is very likely that routine life citizens gets much affected, but yes there will be economic consequences for industries and economy, while western economies are at the for front of major meltdown which may spread the chaos in global financial markets.
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Nifty50 confirmed “Double Top formation” & Head & shoulder Breakdown on weekly closing, which technically marks End of Bull Cycle, theoretical pattern target is seen at 22800, 21750.
In this Bull run Nifty RSI hit 100 in 2025 on the yearly chart, suggesting extreme overbought levels while trailing PE of more 22 represents overvaluation following a 250% rally from COVID low of 7511, that vastly outpaced economic growth lead by euphoria among the new age investors. Read summary of Analysis on Nifty50 here for broader view.
Nifty monthly chart
Tradzo maintains cautious view due to global macro-economic scenarios and advice to reduce weak long positions due to valuation concerns and downside risks.
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Tradzo Research
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