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Nifty

The Nifty index demonstrated a strong upswing this week, climbing towards the upper boundary of its Declining Channel Pattern. A robust rebound early in the week allowed it to surpass the critical 20 DEMA resistance level of 24,040, validating the rising support zone from the 23,500 towards 24000. This recovery coincides with the formation of a bullish reversal candlestick pattern on the weekly chart, hinting at a potential shift in trend. Currently, the index appears well-positioned to extend its rally. A sustained move above the 50 DEMA resistance zone near 24,410 could trigger a decisive breakout, opening the path to the pattern target zone of 24,940, with a minor resistance anticipated around 24,570. While yesterday's price action resulted in a 'Spinning Top' candlestick formation - indicating indecision - there are encouraging signs of momentum. The daily RSI, trending above 51, coupled with the presence of a gap support, reinforces the case for a trend reversal momentum to extend further during the week. Hence traders should consider building aggressive long positions as the index approaches key breakout levels. While investors to maintain a weekly closing stop-loss at 23,240 for existing long positions. We anticipate a continuation of the short squeeze rally, supported by fresh long additions, which could drive the upward momentum further into the week.

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