Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Look Above the Balance & Fail in Nifty 500 Suggests Possible 10%-15% correction

37 sec read

Nifty 500 aka CNX500 trading between 8400-10000 levels since June 2017. Recently Nifty 500 for some time struggled around the psychological reference 10000 levels. Broken outside the upper balance, however, failed to continue sustaining above the balance indicating possible tired investors.

Look above the balance and fail is a critical sign of momentum exhaustion and bring a potential target destination of another side of the balance which roughly comes around 8400-8650 levels.

PE Divergence in Nifty 500

There is a PE ratio divergence seen. The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings.

Fundamentally such divergence is an indication that PE ratio slows down is seen though Nifty 500 hits ATH. Divergence simply indicates Earnings are increasing however it is not reflecting in the price.

Psychological reference 10000 becomes the immediate resistance. Investors are likely to take cautious decision especially those who invest in large-cap and mid-cap segments. Short term & Midterm trend turns on the downside and likely to face immediate pressure at higher levels.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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