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Nifty

On the daily scale, the pattern resembles an 'Ending Diagonal' reversal setup, with a strong base around 21800 and upside resistance near 23040. Despite this, the index has yet to exhibit a positive RSI divergence or display solid relative strength, while it continues to trend within a lower top-lower bottom structure. The ability to transition into a bullish sequence from here will be closely monitored. In the short term, Nifty remains confined within a broad 21800-23000 range, with momentum traders using 22120 as a trailing stop. Options data for the week indicates firm bounds between 22000-23000, with 22500 emerging as a pivotal zone for sustaining momentum. However, the lack of a weekly close above 5 WEMA and a rising ADX above 25 remain short-term concerns. Overall, traders should watch 21800 as a key downside threshold, while momentum traders may look for a breakout beyond 23040 for stronger directional cues. Stay cautious yet optimistic, using 22120 as a support level while watching for a breakout beyond 23040 for stronger directional moves.

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