Energy stocks: Bulls capitalizing on technical support
1 min read 28 Mar 2023, 10:25 AM ISTCharts suggest a possible recovery in the Nifty Energy index. The index was down around 16% in the first two months of 2023 but saw a recovery March 2023.
PremiumThe Nifty Energy index has corrected over 16% in the first two months of 2023 but the recovery in the month of March 2023 indicates that a reversal is on the cards.
On the weekly chart, the index is trading at the confluence of support.
⦁ Falling Channel - The channel is formed by two parallel trendlines that slope downwards. The upper trendline represents the resistance level while the lower trendline represents the support level. The fall has halted at the support line of the channel.
⦁ Fibonacci Retracement - Fibonacci retracement is a popular technical analysis tool used by traders to identify potential levels of support and resistance in a price trend. On the chart, the index has taken support at 38.20% Fibonacci level of the rise from March 2020 lows to the high of April 2022.
⦁ Piercing Candlestick Pattern - The two-candlestick pattern indicates a shift in market sentiment from bearish to bullish. The reversal pattern forming at the support of the channel and Fibonacci retracement strengthens the reversal in trend.
⦁ 200WEMA - The 200-week EMA is a widely watched indicator because it can provide valuable information about the long-term trend of an asset.
On the contrary, the Nifty50 is down around 1% in March 2023 while the Energy index gained over 5% indicating an outperformance.
Keep an eye on the constituents of the Nifty Energy index:
⦁ Reliance Industries Ltd
⦁ NTPC Ltd
⦁ Power Grid Corporation of India Ltd
⦁ Oil and Natural Gas Corporation Ltd
⦁ Adani Green Energy Ltd
⦁ Bharat Petroleum Corporation Ltd
⦁ Tata Power Company Ltd
⦁ Indian Oil Corporation Ltd
⦁ GAIL (India) Ltd
⦁ Adani Transmission Ltd
If you're interested in being part of my charting journey as I share how to create wealth from the profitable trade setups, join my telegram channel – Fast Profits Daily. You'll get access to thebest trading ideasin the stock market.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
