Trend Reversal in Nifty - How to Spot / Identify Market Peaks & Bottoms

The ability to spot trend reversals can be of huge benefit to traders in Nifty Options and Futures Traders (More so for Options Traders).

It also helps for long term investors as good accumulation points.

In this thread, i am going to share some of the metrics that one can follow to identify Trend Reversal in Nifty.

Now, there's no single indicator which will exactly tell you when a Trend Reversal will happen. Beyond the below metrics, one's own instinct plays a major factor as well.

Below are the key factors that can help decide a market reversal

• RSI (Relative Strength Index)
• 200 day EMA
• Parabolic SAR

Nifty RSI (Relative Strength Index)
Below's the Nifty 1 year chart with RSI Indicator below it. In a bull market, Nifty recovers from RSI of around 20 on strong buying and faces profit booking at RSI of 80. This can be seen from the Chart below. In a bear market, Nifty will face strong selling pressure at RSI of 80 and some relief pull back rally at RSI of 20. This comes in very handy to predict trend reversal