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Energy stocks: Bulls capitalizing on technical support

Energy,

In the first two months of 2023, the Nifty Energy index has lost more than 16%, but a recovery in March 2023 suggests that a reversal may be possible.

The index is trading at a convergence of supports on the weekly charts.

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The Falling Channel is made by two parallel trendlines that are inclined downward. The level of resistance is represented by the upper trendline, while the level of support is represented by the lower trendline. At the channel’s support line, the decline has stopped.

The Fibonacci retracement is a well-known technique for technical analysis that traders use to determine potential levels of support and resistance in a price trend. The index has found support on the chart at the 38.20% Fibonacci level of the rise from the low in March 2020 to the high in April 2022.

Piercing Candlestick Pattern: The two-candlestick pattern indicates a shift from bearish to bullish sentiment in the market. The trend reversal is bolstered by the reversal pattern that is forming with the support of the channel and the Fibonacci retracement.

⦁ 200WEMA – The 200-week EMA is a broadly watched marker as it can give significant data about the drawn out pattern of a resource.

In contrast, the Energy Index is up more than 5% in March 2023, while the Nifty 50 is down nearly 1%.

Keep an eye on the Nifty Energy Index’s constituents:

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Disclaimer: This article only serves as information. This should not be interpreted as a stock recommendation.

This article is syndicated from Equitymaster.com. Know your inner investor: Do you have steely nerves or sleepless nights when it comes to investing? Let’s define your approach to investing.

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