Tuesday`s Nifty drop decisively tested & fully filled gap near 24680 - Tradebulls Securities Pvt Ltd
Nifty
Tuesday’s decline in the Nifty witnessed a decisive test of the recent gap area near 24680, which was fully filled. The move also confirmed a breakdown from the Inside Bar formation, a pattern that often signals the onset of directional momentum. The followthrough selling was intense; however, the index managed to close above its critical short-term averages — the 5- and 20-week EMAs, placed at 24730. On the downside, a confluence of supports is observed, with both the 5- and 20-day EMAs converging around 24700, creating an important near-term demand pocket. Below this, stronger clusters of support are placed in the 24650–24600 zone. On the upside, the 5-day EMA at 24860 is expected to act as a cap and may restrict any sharp pullback attempts during the August series expiry. Options positioning for the final day of the series points to a cautiously bearish-to-sideways tone. Resistance is seen around 24850, while support is pegged at 24650–24600. Notably, significant Call unwinding at the 24900 strike reflects reduced conviction from bulls at higher levels, whereas a strong Put OI buildup at the 24500 strike reinforces the broader demand zone and often acts as a magnet for accumulation. For the expiry day, 24850 remains the immediate hurdle. A sustained breakout above this mark would open up the possibility of the nxt leg higher, with conviction likely to strengthen as the September series begins. Until then, traders should closely monitor the 24650–24600 cluster, which is likely to decide the index’s short-term trajectory.
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