Have you predicted market movement as elaborated here?






As stock market traders we are all well acquainted with applying technical analysis tools for trading. And currently market has witnessed crash due to Covid-19 pandemic. In this scenario let us analyse the Nifty 50 movement and few other stock price movements and find out the opportunities some of us would have missed. Then we will understand what the current price levels and patterns indicate for a trader or investor. While this post will be a refreshing one for an experienced trader this will be an educational treat to the novice.
First let us look at the Nifty 50 chart below. With the Nifty chart we will try to find out trading opportunities by applying various technical analysis tools.

In the Nifty chart a long term trendline joining the bottoms since February 2016 is drawn and this trendline serves as a support level.  On Feb 27, 2020 Nifty broke this trendline indicating long term weakness in the market.  If traders who held long position had exited at this level would have been saved from huge fall thereafter.  And traders could have initiated a short trade at this juncture.
Another interesting finding is the divergence in the “Relative Strength index (RSI)” as shown in the Nifty chart below.

From the chart you can find that Nifty exhibiting higher tops and RSI exhibiting lower tops in the same period. This means RSI is showing a negative divergence that signifies slowing momentum and an impending fall in the prices. A trader should have been alerted and if he had been cautious, he would not have been trapped by the higher highs created by the indices.
Exercise for the readers
The Nifty chart has also exhibited other reversal patterns. Now we leave this for the readers to identify. The identified patterns or any other technical signals can be shared in the comments section available below this post.
What do the current trend in Nifty signifies?
The current pattern in Nifty chart looks like a flag pattern. This is highlighted in the chart below.

We know flag is a continuation pattern which means existing trend will resume once the price breaks above or below the trendline as the case may be. In the chart above a flag is highlighted by drawing a trendline. Currently the indices points are moving within the range. A breakout of the range will decide the next course of indices movement. Till such a breakout happens one should trade cautiously with strict stop loss and lower targets.
Interesting! This and many more related to stocks and investment is explained with short stories and illustration in our educational website univ.tradeplusonline.com. Log on now and learn with fun!
Note
This Content Was Originally Published By https://blog.tradeplusonline.com/home/have-you-predicted-market-movement-as-elaborated-here/
Location: Chennai, Tamil Nadu, India

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