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Nifty

Nifty witnessed a relief rally led by banking majors which helped the index fill the gap area around 23050. The breakdown from the consolidation phase, with the 20-day EMA at 23,320 acting as pivotal resistance, indicates a weak market structure. A close above this level could spark fresh buying interest, while failure to reclaim it may sustain bearish momentum. Weak trend indicators suggest that rallies are likely to face resistance near 23,300, a critical hurdle. On the downside, support zones between 22,800–22,400 are crucial, with breaches which could potentially drag the index lower toward 22,000. Options data reveals heavy call writing at 23,300 and 23,500, reflecting strong resistance, while support has shifted lower. Amid sectoral divergence, defensives are showing resilience, while cyclicals remain under pressure. Traders should focus on stocks near support levels and avoid those showing breakdowns. In the context of earnings season and macroeconomic changes, a balanced portfolio with both long and short positions is prudent, with a focus on reacting to price action near key levels to navigate ongoing volatility.

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