Technical Analysis to capture present Nifty movement

Current Scenario-

Nifty 50 Daily chart

1. RSI hit from oversold(28.36) to overbought(83.84) in a single run & Let me tell you, this is a very rare scenario.
2. Took 42 trading days in this run & stayed above the 80 range in RSI(14d) for 4 days. This is again a very rare scenario.
3. The regression (2 std. div.) range is broken & tested as resistance if we draw a trend line connecting the lower range of the channel.
4. The USA market has already started a selloff after yesterday's meeting of FED. What perfect timing, right?

Fixed Range Volume Profile Analysis on current up trend-

Nifty 50 Daily chart

Fixed range volume profile analysis shows the traded volume amount of an asset over a specified period, at certain price levels. As it shows the 1st highest volume range is at around 15840 & the 2nd highest is around 16200. All these price ranges are nearby to the Fibonacci retracements. All these levels can play an important role as support in the coming days!

Why I am using technical analysis here?

Because Technical analysis is an analysis methodology for analyzing and forecasting the direction of prices through the study of past market data, primarily price and volume.

Dow believed that the stock market as a whole was a reliable measure of overall business conditions within the economy and that by analyzing the overall market, one could accurately gauge those conditions and identify the direction of major market trends and the likely direction of individual stocks.

Let’s figure out what is happening in markets & upcoming Possibilities-

In 2008, markets collapsed but price action started in 2007.
Check the chart I attached below,

Nifty 50 Daily Chart (2007 & 2008)

1. RSI(14) stayed above 80 for around 10 calendar days. Let me repeat this, 10 calendar days.
2. Later price was hitting new highs but RSI was not, It is called a bearish divergence in technical analysis.
3. RSI hit 87 in a single run from 32, oversold to overbought without any breath in 31 trading days.
4. The regression (2 std. div.) range was broken & tested as support first and then resistance if we draw a trend line connecting the lower range of the channel.
5. Later we witnessed one of the darkest histories of the financial crisis.

2018 is perfectly correlated to the current situation! Why?

Nifty 50 Daily Chart (2018)

1. Here also RSI(14) hit from oversold(32.53) to overbought(82.59) in a single run.
2. Took 35 trading days in this run & stayed above RSI 80 for 4 days.
3. The regression (2 std. div.) range was broken & tested as support first and then resistance if we draw a trend line connecting the lower range of the channel.
4. Later price dropped directly to 70–80% of the last up move in just 6 sessions & then the price became sideways to bearish.

Conclusion-

Technicals suggest a bearish market in the coming days but one should not panic. It may fail & market may recover because history does not repeat exactly similar way every time! But it’s time to be cautious. Take good and smart decisions for the long as well as short run.

This one-sided move from oversold to overbought usually triggers a psychological Fear in market participants of missing out on the bull run and studies show that FOMO leads to extreme dissatisfaction and has a detrimental effect on our physical and mental health. People start buying even at higher prices which leads to high risk and a poor risk-to-reward ratio. They also give exit to the institutional players and after that whenever the market gets bad news, people sell in panic, which results in a market crash.

These psychological errors help smarter players to exit at a higher price and enter when people exhaust & sell at the lowest prices…