22,300 key for further downside in Nifty, bulls uncomfortable after India VIX rises for 7th day

📊📊The Nifty 50 opened strong at 22,766 and hit a new all-time high of 22,795, but selling pressure at the end of initial hour pulled the market significantly down as the day progressed. Finally, the index closed at 22,476, down 172 points and formed long bearish candlestick pattern with small lower shadow on the daily charts, which engulfed previous three candles.

"The Nifty index is showing signs of near-term bearishness as it forms a Double Top pattern (not ideal one) on the daily chart, coupled with a Bearish Engulfing candle. This suggests a sell-on-rise approach in the market.

🌐Bank Nifty🌐

The Bank Nifty has broken below 49,000 mark as well as fell below the upward sloping resistance trendline that acted as a support in previous two sessions. The index declined 308 points to 48,924, but still managed to defend 10-day EMA (exponential moving average 48,683), which can be immediate support, followed by 48,300 which coincides with 21-day EMA.

Meanwhile, the volatility has consistently been moving on the higher side, making the bulls uncomfortable. The India VIX, the fear index, jumped 8.72 percent to 14.62, from 13.45 levels, taking the total seven-day gains to 43.4 percent.

🌐🌐Mr John Wilson of IB ,believes three themes – boosting cyclical momentum, maintaining the capex drive, and ensuring continuity in governance/reform agenda - will make economic outlook brighter for India.

🌐🌐Maintaining the reform agenda by the government, which is one of the three themes, is crucial for economic growth. A host of reform building blocks have been undertaken by the government in the past six years – plumbing, lower costs, monetary policy, and addressing legacy baggage.

🌐🌐On the Fed fund rate cut, Mr John Wilson said with growth and inflation both running above trend, it would become increasingly hard for the Fed to cut month after month. "Our baseline assumption is for 50 basis point cuts in 2H-2024 by the Fed subject to the evolving economic conditions.