Should you go long or short Nifty? Rupak De of LKP Securities explains

economictimes.indiatimes.com:

NEW DELHI: After headline index Nifty ended in the red for the fourth consecutive week, conditions appear unfavorable for most long trades, opines Rupak De, Senior Technical analyst at LKP Securities. “The price action demonstrates an inability to sustain higher levels, curtailing the scope for significant upward movements. This pattern indicates a market environment where caution and strategic planning are crucial, considering the challenges posed to sustaining profitable long positions,” he says.

Edited excerpts from a chat:Nifty ended in the red for the fourth consecutive week. Will it be a stupid idea to go long now given all the weak global cues and with the earnings season behind us?The Nifty index embarked on a downward trajectory after reaching an all-time high of approximately 20000. Subsequently, it followed a pattern characterized by successive lower peaks and troughs, forming a discernible descending chart pattern.

Adding to this, the index has consistently remained below its 21-day Exponential Moving Average (EMA), a sign that underscores the prevalence of a bearish trend. The prevailing market scenario draws striking parallels to that of January 2023, a period marked by an extended downtrend accompanied by considerable market turbulence. Within such a backdrop, the conditions appear unfavorable for most long trades.

The price action demonstrates an inability to sustain higher levels, curtailing the scope for significant upward movements. This pattern indicates a market environment where caution and strategic planning are crucial, considering the challenges posed to sustaining profitable long positions.Nifty Bank has fallen around 2,500 points from its 52-week high. How does the trade set up look like now?Si