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Nifty

Nifty index close above its 5 DEMA lacked conviction as it ended the session on a negative note. A follow-through move above 23,350 is crucial for a pullback rally to materialize. The formation of an 'Inside Bar' pattern near the weekly option base of 23,000 signals a potential reversal, but caution is warranted as technical indicators reflect persistent bearish momentum. The daily ADX is trending higher, indicating stronger bearish strength, while the RSI continues its steady decline, pointing to weakening relative strength. Option data suggests a downward shift in the trading range to 22,800–23,800, with critical support at 23,300 and 23,000 and immediate resistance around 23,800. Traders are advised to avoid long positions unless the index decisively breaches the 24,260-resistance level. A long-short strategy remains prudent until a close above 23,840 aligns with the 20 DEMA. With the earnings season underway, increased volatility is expected, making a cautious approach essential. Broad range action between 22,800 and 23,800, with 23,500 as the midpoint, is anticipated for the next few sessions.

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