Nifty weakened and signaled a bearish breakdown

On 23rd April Nifty 50 confirmed the minor reversal witnessed on the 22nd April with a gap down opening by a whopping 175 points. During the early hours an attempt was made to break 24300 on the upside but the momentum failed to sustain. Gradually Nifty drifted below and stayed for a long time around 24200 and finally gave up the 24200 support level before closing for the day at 24173.

The closing confirmed two things; a clear break of the EBR/EBL band and a solid red candle on the MHAF chart. This signaled a fresh bearish move and according to the spreadsheet below we could have gone short at the closing price.

This bearish trend should be over if Nifty reverses and inches above 24385 (dynamic level, will depend on Friday's price action). A fresh bullish signal may appear around 24500 level. However, no short position was taken because we are at the final week of the April series and waiting for a fresh trend to begin in the May series after 28th April.

Happy trading.