The Nifty peaked at 18,604 levels on October 19, 2021, and from there slowly and steadily the indices corrected 1,000 points. This absolute point mode could be one of the slightly higher corrections than the other two for the year 2021. However, the indicators behave in exactly the same way as the two previous corrections of the year.
On the drawn maps, we have placed two grids. The top grid is a “SWING INDICATOR” and the bottom grid is a “NIFTY INDEX PRICE” table. Our focus is on the most recent corrective wave for the index, which took place in JUNE-JULY 2021. As the charts show, when the SWING INDICATOR enters a “LOWING” area, or basically there is just a crossover so it indicates the possibility of a consolidation with a downward bias.
Now in the June-July period, the indices have consolidated for almost a month and a half, with the NIFTY remaining in a range of 500-700 points for itself. This time around, the index range is around 17,500 supports and resistances are placed at 18,300 odd levels.
The derivatives data is also intriguing for the current November series. It indicates that there is a strong CALL handwriting near the 18300-18500 area. In fact, for example, in the last two trading sessions of this rebound on INDEX, the authors of CALL have created an aggressive position.
The construction of EMERGING MARKETS also indicated that market trends may remain sluggish. As the markets absorb the flow of negative news about stocks or the reaction to results, the stock becomes very specific to stocks and not generic to a single sector.
The first end of consolidation signal could probably occur when the SWING indicator returns to a strong trend mode. This could be a game-changer for NIFTY. Looking at previous opportunities, it took almost a month of consolidation or a little longer. And with each consolidation, the breakout resulted in a new milestone for the NIFTY. If so, it might be worth waiting for the NIFTY to break above the previous high and aim for higher psychological breaks in the short term.