Nifty fell sharply on July 19 on the back of a sharp fall in the Asian markets and overnight weakness in the US markets.
From the intraday low, Nifty recovered more than 50 points to end the day with losses of 171 points at 15,752.
This is the biggest fall in the Nifty in percentage term since April 30, 2021.
In the last two months, Nifty has made multiple bottoms in the range of 15,500-15,700 levels.
On the derivative segment, we have seen Puts being written at 15,500, indicating this level will act as strong support going forward.
Though Nifty has witnessed a sharp correction, it remains in an intermediate uptrend as long as it is trading above the important support level of 15,500.
A short-term trend reversal would be confirmed only if the index closes below this level. For traders, our advice is to remain bullish and accumulate longs on declines with the stop loss of 15,500.
On the higher side, Nifty is likely to find immediate resistance at 15,882 and 15,960.
Nifty Smallcap index has broken out on the weekly and monthly charts.
We expect its outperformance to continue for the coming weeks also. Therefore, the focus of the traders should be on mid and smallcaps for higher returns rather than largecap stocks.