Nifty retraces 50% of January drop; Risk-reward does not favor long trade

The Nifty has now retraced 50% of the fall from January levels; he retraced 50% of that fall. Now, a 50-66% retracement is normally a big congestion zone for the market, so the market is just at the start of a congestion zone now. Purely from a risk-reward point of view, this is not conducive to a long trade, it may turn out to be something else. But he can’t make long rallies which he was like say two or three days back.

Also, the Nifty is trading above all the major moving averages, the Bank Nifty may have a bit more in terms of the 50 and 200 day moving average. However, one of the charts that had unfolded was the Nifty against the mid-caps, I have a feeling the next few days could belong to the mid-caps and small caps.

Watch the accompanying video from CNBC-TV18’s Anuj Singhal for more details.

First post: March 21, 2022, 08:31 STI