Nifty down 13 straight sessions, below 5-DEMA, with high volumes - Tradebulls Securities Pvt Ltd
Nifty
The Nifty index has been trending lower for 13 consecutive sessions, consistently closing below its 5-day exponential moving average (DEMA), accompanied by heightened volume activity. On the daily timeframe, the RSI has now officially entered the oversold zone, while the ADX indicator is stabilizing below 40 — signaling a loss of momentum in the ongoing downtrend. Additionally, the sharp descent of short-term moving averages further confirms the bearish sentiment. Given these oversold conditions, a technical rebound is likely in the upcoming sessions. Immediate resistance levels are placed at 22,300, followed by 22,500. However, the key factor will be the index's ability to sustain any pullback in the early part of the week. The 22,500 zone holds significance as it coincides with a Run-Away Gap, and the potential occurrence of an 'Exhaustion Gap' could act as the first indication of a formidable bottom in the ongoing corrective phase. This setup could serve as an early signal for fresh portfolio allocations, laying the groundwork for a renewed bull trend. However, it is advisable to remain nimble-footed and await firm reversal signals before initiating trading long positions too. If the anticipated pullback materializes, traders should avoid adhering to a SELL on RISE strategy, as the market might be on the cusp of a turnaround.
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