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Nifty

Post the Nifty's 9% correction has found support near its 200-day moving average (23,500), coinciding with a key channel pattern. Weak global cues, a strong dollar index, record-low rupee levels, high inflation, and foreign investor outflows have driven the decline. However, a positive RSI divergence hints at weakening bearish momentum, though a clear reversal is yet to be confirmed. Options data indicates a range-bound outlook of 23,300–23,700, with strong resistance at 24,000, reflecting cautious sentiment. India VIX cooling from 19 to 13 suggests reduced selling pressure and potential stabilization. The Nifty is expected to consolidate within the 23,300–24,000 range in the short term. Traders can leverage long-short strategies, focusing on range plays, with leverage longs activated only above 24,140. Investors can use this correction to accumulate oversold mega-cap stocks displaying relative strength, positioning for a potential recovery as market conditions stabilize further.

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