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Nifty

After six consecutive sessions of gains, the Nifty closed below its opening levels, indicating profit booking at higher zones. Despite trending above the 200 DEMA of 23,400, the index struggled to sustain its gap-up gains, reflecting a lack of confidence in fresh long positions. A dip below 23,390 could weaken the ongoing momentum, while a decisive close above 23,800 may open the door for an extension toward 24,000 in the coming days. Momentum indicators continue to signal strength, with the RSI in the overbought zone at 72 and ADX at 37, confirming strong directional momentum. However, the overbought RSI suggests a cautious approach. While sectoral rotation may lead to some profit booking, the broader uptrend remains intact. Traders should maintain long positions as long as 23,390 holds on a closing basis, but intraday dip-buying may not be the most effective strategy at this stage. A breach of 23,390 would warrant reducing long exposure as a prudent risk management measure. With the rally extending from 22,350 towards the 24,000 zone, traders should consider long-short opportunities, as the reward-to-risk equation becomes less favorable near key resistance levels.

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