Nifty starts week stable, holds pullback, closes above 23,400 - Tradebulls Securities Pvt Ltd
Nifty
Nifty commenced the week on a relatively stable note, managing to hold on to its pullback and closing the session in the green above the 23,400 mark. During the early part of the session, the index slipped below 23000, forming a swing low near 22955. However, the formation of a Piercing Line candlestick pattern near the close has brought some optimism for a potential short-term pullback, initially towards its 5-DEMA zone near 23630. Despite this recovery, last week’s recurring lower-gap formations on the daily chart continue to highlight the fragile nature of the market, largely influenced by ongoing geopolitical tensions. From a technical indicator perspective, the trend strength indicators remain divergent. The ADX continues to scale higher, suggesting that the prevailing trend still holds strength, while the RSI is rebounding from its oversold zone without displaying any positive divergence. This combination points toward a fragile pullback within an overall weak market structure rather than a confirmed trend reversal. The immediate gap resistance zone of 23556–23630 is likely to act as a short-term pullback hurdle, particularly since the index is currently trading significantly below its 5-DEMA, placed near 23630. For the week, the major resistance is seen around 23830. On the downside, the index could find temporary support near 22920, where an unfilled gap from the previous up-move still exists. Given that the broader trend remains under pressure, traders are advised to avoid aggressive long positions and instead adopt a range-trading strategy until a clear reversal in price action and market sentiment emerges. Initiating fresh positional trades without confirmation should be avoided. It is also prudent to maintain adequate hedges on existing long positions and keep position sizes smaller, considering the heightened volatility driven by geopolitical developments and fluctuations in crude oil prices.
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