RSI Overbought at 65, ADX at 38 Signals Strong Momentum - Tradebulls Securities Pvt Ltd
After a strong six-day rally, profit booking has dragged the index toward its 200-DEMA support at 23,400, as anticipated, reflecting a lack of confidence in fresh long positions. A close below 23,390 could weaken momentum and trigger further selling pressure, while a decisive close above 23,800 may open the door for an extension toward 24,000. Momentum indicators remain strong, with the RSI in the overbought zone at 65, suggesting a cautious approach, while the ADX at 38 confirms strong directional momentum. The broader uptrend remains intact, but intraday dip-buying may not be ideal at this stage. Traders should maintain long positions as long as 23,390 holds on a closing basis, but a breach of this level would warrant reducing exposure as a prudent risk-management measure. With the rally extending from 22,350 to 24,000, traders should consider long-short opportunities as the reward-to-risk equation becomes less favorable near key resistance levels.
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