The global stock market has been on a roller-coaster ride in recent weeks, largely fuelled by the ongoing tariff war initiated by former US President Donald Trump, who imposed tariffs on global goods, only for China to retaliate with an additional 34% duty. As a result, we have witnessed a significant sell-off across various asset classes, with volatility spiking to levels higher than usual.
The Dow Jones has seen a correction of approximately 18% from its high, while commodities like Gold and Silver have experienced significant profit bookings. Cryptocurrencies, including Bitcoin, also faced substantial selling pressure amid the broader market downturn.
However, despite the seemingly grim situation, there may be opportunities for traders who know where to look and how to manage risk effectively. If you have been following our articles, you will recall that on March 26, 2025, we recommended booking profits, highlighting reversal dates in line with the Fibonacci Time Cycle theory. As we predicted, the Nifty corrected by around 2,000 points from its high of 23,869.
So, what’s next? Should you buy the dip, or wait for more clarity?
A Volatile Opportunity?
The market’s recent movement reminds us of a classic line from the movie The Godfather: “I will make him an offer he can’t refuse.” It almost feels like the market is presenting traders with a similar opportunity—one that may not come often, especially amid heightened volatility.
Nifty50 Daily Chart – A Bullish Reversal Patterns
When we analyse the Nifty50 daily chart, it reveals multiple Bullish Harmonic patterns, which are often considered signals of a potential bullish reversal. These patterns suggest that the current market dip could be a buying opportunity if the trend shifts positively.
There are three harmonic patterns formed on the chart:
- Bullish Gartley
- Bullish Black Swan
- Bullish AB=CD
Moreover, the Bullish Belt Hold candlestick pattern is evident on the chart, further strengthening the case for a potential reversal. The combination of these harmonic patterns and candlestick formations suggests that, if the recent low of 21,743 holds, there may be a potential opportunity for a bullish reversal in the market.
Should You Be Buying Now?
Given the technical indicators, we are seeing promising signs of a potential market reversal. However, there is still caution required. If the Nifty50 holds its recent low at 21,743, we might see bulls start to dominate and capitalise on the market’s potential rebound. However, the risk remains that volatility could lead to further price swings, making proper risk management crucial.
Sectors to Watch Amid Volatility
While volatility can be unsettling, certain sectors are likely to outperform others. The banking and IT sectors, for example, tend to be volatile during times of uncertainty. However, there is one sector that stands out for its potential risk-reward ratio – FMCG (Fast Moving Consumer Goods).
Nifty FMCG Index – A Defensive Play
Analyzing the weekly chart of the Nifty FMCG Index, we observe that the sector is exhibiting promising bullish momentum.
The index opened the week with the Open-Low candlestick pattern, indicating a positive sentiment among investors. Interestingly, this movement is happening just above the 200-week exponential moving average (200WEMA) channel, a critical support level. In 2022, a similar structure was formed, and the index reversed positively from 200WEMA Channel.
Notably, while the Nifty50 breached its March low of 21,964, the Nifty FMCG index did not. This indicates a positive divergence between the FMCG sector and the broader market, suggesting that this sector is outperforming and may present a safer investment during turbulent times.
Should You Buy the Dip?
While the market remains volatile, the presence of bullish harmonic patterns and key support levels on indices such as the Nifty 50 and Nifty FMCG index suggests that the dip may be a potential buying opportunity. The FMCG sector, in particular, appears to be offering a better risk-reward ratio in these uncertain times, making it an attractive option for cautious investors.
Note: We have relied on data from throughout this article. Only in cases where the data was unavailable have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Brijesh Bhatia has over 18 years of experience in India’s financial markets as a trader and technical analyst. He has worked with UTI, Asit C Mehta, and Edelweiss Securities. Presently, he is an analyst at Definedge.
Disclosure: The writer and his dependents do not hold the Stocks discussed in this article. However, clients of Definedge may or may not own these securities.
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