Is Nifty 50 Taking A Breather?

We're looking at the daily chart of Nifty50 and after a two-session correction, the index has marked a bearish divergence at the top. While we have been overweight on the stocks for months now, this is a signal we'd like to observe.

Needless to say that we've witnessed a phenomenal move in the market with lagging sectors putting up a great show as well. But it is only natural for a trend to pause or witness a slight correction within a long-term bullish cycle. With this bearish divergence in place, a short-term trader could look at re-evaluating their current position in the market and look at the market with a lens of caution.

Immediate levels of support now come in at levels of 13,800 and 13,100. This could well be a minor pause with Nifty turning back towards  15000, but in the interim, we'd like to see what happens here.

It is important to reiterate that this bearish divergence is one of many signals that we track and is currently the only indication of a pause in the trend. We are keeping an eye on this short-term signal of potential weakness as we go forward.

If you are a long-term investor, you might want to read this before taking any action.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team