The breaking of 22,930, the most important level for Nifty 50 for a bullish scenario, marks an entry into a minimum one-year bear territory, said Rohit Srivastava, ace trader and Founder Indiancharts.
“We could be in a one-year bearish phase, that is, till September this year. That’s the scenario on the table now,” he said speaking exclusively to Moneycontrol on April 7.
“Unless, something changes seriously – which means, let’s say a significant rollback of the tariffs, the scenario won’t change. Most data points right now point to a global recession. Unless, the tariff changes are rolled back, this is not going to change.” Srivastava said.
"Right now, all indications are that we will be in a bearish phase till September at least, meaning we will see lower lows, lower highs and the possibility of dropping a lot more", said the founder of Indiancharts.
The immediate, important level for the Nifty is 21,661, which is a 23% retracement of the Covid rally, said Srivastava. The next very important level is 21,281, which is the low we saw during the general election last year. A re-test of this level is a very possible scenario, said the chartist. “If we manage to hold this, we may not fall below that. This is in case that the global situation hits us, but hits us less.”
In the case of a full-blown global recession, which hits us as well because of second-order impact, we can’t bank on 21,280 level on the Nifty 50. We will need to look at a bigger retracement of the Covid rally, and the level to watch out for would be a 38% retracement, which is placed at 18,954, Srivastava added.
In case of a recession, fundamental factors such as a rate cut won’t work, said Srivastava, adding that it will take time for things to start working again. Even if you see a scenario of lower tariffs, lower rates, lower inflation etc, which will mean a much better trade set up, it will still take time, and that’s why September is our best case for bottoming out, Rohit Srivastava reasoned.
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