Nifty Still in a Pullback Mode. Likely to Slide to 18,000-18,400 Range

Indian Equity Market Index climbed to a high of 20,200 in September 2023. Since then it has shown signs of exhaustion: it seems a likely pullback is underway, which should not surprise traders as Nifty likely needed a breather having charged all the way up from the 16,800 level in March this year to cross the significant barrier of 20,000 level in September.  

Let’s take a look at the weekly chart.

On the weekly chart, I have drawn an up-trending Schiff Pitchfork, with its origin at the major low from all the way back to March 2020. The pitchfork contains the price movement nicely. As can be seen, the price has been moving between the lower parallel (support) and the median line (resistance) of the pitchfork with multiple touches. The most recent touch at the median line on the upper parallel is at the 20200 level. Now the bulls appear to be exhausted, likely taking the price all the way to the lower parallel of the pitchfork anywhere in the range 18000-18400.

Here is a daily chart with a down-trending regular pitchfork drawn inside the larger up-trending weekly pitchfork capturing the pullback price movement on the daily chart. 

It would be interesting to watch whether the price rebounds at the lower parallel of the weekly pitchfork (support) or breaks the pitchfork for a longer, more painful, downfall.

For now, I would be cautious about buying Nifty futures as any gains owing to the temperamental movement of the index as seen last week might be transient at best as the price swiftly assumes its downward trend all the way to the weekly support.