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Nifty

The index faced significant selling pressure after breaching the channel pattern support. It not only slipped below its 20-day Exponential Moving Average (DEMA) of 25,555 but also closed below this level, turning it into an immediate hurdle. The recent price action has led to an expansion in the trading range, suggesting further weakness towards the 25,000 level, which is the immediate option base. Immediate support is observed around 25,220 (the channel pattern target), followed by 25,080 if there is a decisive close below the pattern target. With no major reversal formations on higher timeframes, a range-bound oscillation within the 25,740-25,220 zone is likely, and a further drop to 25,080 is possible if the index does not recover above 25,555. The trend strength indicators are turning neutral, as the daily RSI has fallen below 50, while the ADX is rising above 30, with the +DI dropping below 25—signaling caution. However, despite the weakness, there is no negative crossover on the 5 and 20 DEMA, indicating that the trend may still have a chance to stabilize around support levels. For momentum traders, a combination of long and short trades may be suitable, while investors could consider accumulating staggered long positions as the index approaches the crucial 50 DEMA support at 25,080.

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