Home > India’s Nifty 50 and Sensex Suffer a Blow-Off Top (Possibly)

India’s Nifty 50 and Sensex Suffer a Blow-Off Top (Possibly)

The Nifty 50 (Nifty Fifty) index of top Indian stocks has been on a sensational bull run, but has this bull run now run out of steam with a blow-off top chart formation? Same for the Sensex index.

Since I took a short position in the Nifty 50 index of top Indian stocks yesterday, I was disappointed to see the price shoot up (putting me into loss) overnight when I couldn’t do anything about it in my time zone. But frustration turned to elation this morning when I saw that the price has shot back down to put me into profit.

India 50 1-Hour Price Chart (source: IG)

This could be an example of a blow-off top or exhaustion move, which Investopedia defines as “a chart pattern that shows a steep and rapid increase in a security’s price and trading volume, followed by a steep and rapid drop in price”.

What Are the Nifty 50 and Sensex Indian Indices?

The Nifty 50 is an index of the top 50 blue-chip stocks listed on the National Stock Exchange (NSE) of India Ltd. The Sensex is an alternative Indian index of 30 stocks listed on the Bombay Stock Exchange (BSE).

Should You Sell the Nifty 50 or Sensex Now?

If you think that the bull run of India’s benchmark index or any other international index has now been exhausted, you could consider going short in anticipation of a crash, correction, or bear market to come. Then again, my analysis could be wrong, and this could be a temporary pullback, which means you should be establishing or sitting on existing long positions.

Nifty 50 Price Targets

Since I already have a short position at around today’s price, I won’t be going short again (scale into my short position) unless the price goes back up to the spiked-up level of 17770. If the price continues to go down instead, who knows how far it could go, and how fast?

What you do, of course, is up to you.

Where Can You Buy or Sell Stock Indexes Today?

If you agree with my analysis, you might want to short the Nifty 50 or Sensex index. If you disagree, you might decide that the price pullback is a good time to buy. Either way, you’ll need a broker to buy or sell this or any other stock index, and two of the best brokers we know are:

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