Nifty forms Bullish Engulfing near 24610–24560 support, hinting at reversal - Tradebulls Securities Pvt Ltd
The Nifty index is at a critical stage as a Bullish Engulfing pattern has emerged near the support zone of 24610–24560, offering hope for a potential reversal. However, this signal will only be validated if the index closes above 24900. The 50-day exponential moving average at 24940 forms an additional hurdle, where a breakout could trigger short covering. Despite this setup, Nifty remains trapped within a declining channel, indicating vulnerability to further swings. Technical indicators continue to reflect weakness, with ADX above 34 showing strong downward momentum and RSI below 42 highlighting bearish undertones. Yet, oversold conditions and OI PCR readings (Nifty 0.71, Bank Nifty 0.60) suggest scope for a short-term rebound, while India VIX below 12 keeps volatility low. Options data points to strong resistance at 25000 and support at 24700–24600 zone for the day. A close below 24560 could extend losses toward 24000, while a breakout above 25250 would end the corrective phase. Until such a breakout occurs, traders are advised to adopt a long-short strategy with strict risk management.
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