Technical view NIFTY 50 and NIFTY Auto:

NIFTY 50:

Post the covid fall last year the Nifty 50 fell to the low of 7493 level from there we witnessed
a sharp rise in the index which helped the NIFTY to reach its all-time high level of 18,604
level and then the war in Ukraine disrupted the supply chain issues followed by heated fuel
prices and other geopolitical issues pulled the markets down due to which we saw NIFTY
retracing by -18% from its all-time high thus creating a flag pattern on the charts which is a
continuation pattern which means that the markets are in the bullish trend in the long term
and the correction is a temporary phenomenon.

After post continuous selloff for 10 months, we saw the exhaustion in the markets and the
market and we saw the markets creating strong support at 15180 to 15500 levels where the
markets consolidated in a similar range last year in the same month between June-July.
Post-taking support markets have risen in a similar manner as they rose to post-covid
recovery.
Despite the strong rally the overall structure on charts remains to be little bearish side as the
pattern on the chart is higher lowes which is indicating that some corrections are yet to come
also Macro economic situations remain to be little bearish as the prolonged lockdowns in
China and rising Inflation are limiting the overall grown of the economy.

On the other hand, the Lows are looking to consolidate and the difference in fall is not drastic
which is the probability of trend reversal in the market this hypothesis will be confirmed if in
the next profit booking the market finds support at 16080 to 16157 range and gives reversal.
Sector Analysis NIFTY AUTO:

The auto sector has been in a bearish phase for a long period, The sector broked its strong
uptrend of approx 9 years and started its descent on 1 Jan 2018 it was due to new policy
changes in the Auto sector with the introduction of BS norms and followed by the global
economic slowdown and also followed by the covid which pushed the sector into deeper
crisis also the rise in input costs due to the supply chain issue due to war which had an
impact on margins of auto stocks. The slowdown also impacted the consumer sentiment
which reduced people's discretionary spending impacting the demand of the sector.
After hitting an all-time low of 4466 on the 13th of March 2020 the Index saw buying for the
first time due to which the index was able to break its downward channel with a “V” shaped
recovery indicating changes in trend. After the recovery the Index consolidated for a few
months sideways mimicking the NIFTY 50, Index gave a breakout of the range on 09th
November 2020 confirming the trend reversal.

The Index is making a flag and pole pattern where it gives breakout and then trades in a
narrow range sideways before giving breakout again.
The trend in the Auto sector is strong as the Auto index has broken its previous high of
12113 and currently trading at 13035.

Moving average is also an important tool to be used while identifying the current trend of any
Index, stock or commodity for that we can use a simple moving average of 200 days it gives
us the mean of the price for the past 200 days and it is widely used parameter in technical
analysis.

If the price trades above it then we can say that the trend is uptrend like what we can see on
the chart that the Auto sector index in May 2009 the price gave a breakout from below in
auto sector index and then we witnessed a long bull run in the Index, Similarly when the
price gave breakdown from its moving average in 2018 there was a downward trend in the
auto sector.