Summary: – Today, The Indian benchmark index Nifty50 closed in the green after adding 73 points to 11222 after 9 days of straight fall. The index opens on a flat note and trading with negative biases in the first half. But in the second half, the index rallies from the day low of 11108.30 to the day high of 11294.75. The market breadth is positive with 34 shares trading positive for every 16 shares trading in the red.
The Recent Correction Rally in Nifty50, Is a Great Buying Opportunity?
Here We are giving some of the supportive facts for the above statement.
1)The recent bullish rally that we have in Nifty50 starts from 26 Oct 2018 to 18 April 2019 of 1852 point has 38.2% retracement level at 11146 and 50% retracement level at 10928.
2)In addition to this, The six-month bullish rally has a support line again finding support near the level of 11000.
3)The recent correction rally has brought down the factor of overbought from the market.
4)Again 11000 has a psychological level will act as a support in the short run.
5)Option Data also suggest 11000 strong support for May series.
6)US-China Trade War:- China retaliates after The US imposed increased tariffs on Chinese goods worth $200 Billion may call for a Truce in the short run. As the two worlds, biggest economies have a time of the month to sign the deal.
7)On the domestic ground, The Biggest event for the financial market is the Lok Sabha election. The result for the election 2019 is scheduled to announce on 23rd May 2019. The Ruling Party has a good chance to form the government for the second time. In addition to this, PM Modi led BJP govt strong retaliation to Pakistan on Pulwama Attack further boost the chance in the ongoing election.
Some bounce back can be seen from the psychological level of 11000 but The Nifty50 index enters the positive zone only if decisively breached and hold the level of 11370 on closing basis.
Nifty50 Resistance Level of 11250-11295-11340-11370
Nifty50 Support Level of 11190-11150-11110-11070.
Bottom line:- Buying dips around 11020-11120 with a stop loss of below 10920 for the target of 11500-11700 can be a profitable move in a short time. Below the support level of 10920, Nifty50 may show some more correction to the level of 10780-10660.