SEBI Analysts Signal Range-Bound Trade
An inverted hammer on daily charts signals waning momentum, but analysts advise a buy-on-dips approach as long as 25,000 holds firm.
Indian equity markets extended their gains for the fourth session, with the Nifty closing above 25,100. However, during the session, they failed to hold on to intraday gains, signaling supply pressure near crucial resistance levels. Profit booking emerged at around 25,200.
Will the bulls push through in Wednesday’s session? SEBI-registered analysts shared the trade setup for October 8 on Stocktwits.
Trade Setup For Wednesday
Analyst Mayank Singh Chandel highlighted that the higher-high, higher-low structure remains intact for the Nifty, maintaining a positive overall trend. As long as 25,000 holds, the market favors a buy-on-dips strategy.
On the upside, Chandel sees immediate resistance at 25,200, adding that if the index sustains above this level, it could test 25,250–25,450. On the downside, immediate support is seen at 25,000, followed by 24,880. He concluded that market bias remains positive above 25,000. Only a decisive close above 25,200–25,250 can trigger a rally towards 25,450. Until then, expect range-bound trade with a buy-on-dips approach.
Bharat Sharma of Stockace Financial Services noted that Nifty faced rejection twice at the 25,200 level, an area of strong resistance. On the daily chart, the formation of an ‘inverted hammer’ candlestick is a pattern that could unsettle bullish sentiment. However, Sharma added that there was no need for concern for positional traders as the 25,200+ resistance has been tested multiple times and could potentially weaken.
Going ahead, Nifty must decisively break through the 25,200–25,250 resistance band for any significant upside move.
For intraday trading, Sharma identified immediate resistance at 25,140, followed by 25,170-25,220-25,250 and higher levels. On the downside, immediate support is seen at 25,080, which, if breached, could open the doors to 25,030-24,980.
Dipak Takodara also reiterated that the formation of an inverted hammer on the daily chart for Nifty is a caution sign of tired momentum, not a sell signal by itself. A slip and close below 25,000 would confirm the warning and open a dip toward 24,850. On the other hand, a firm close above 25,200–25,250 would negate it and keep 25,400–25,500 in play. Momentum favours the bulls if the price clears 25,250.
Key levels to watch:
• Support: 25,000-24,850; 24,550-24,500
• Resistance: 25,200 – 25,250; 25,400-25,500; 25,650-25,700
Takodara concluded that as long as Nifty holds 25,000, bulls can attempt another push toward 25,200–25,250. A strong close above that band would likely extend to 25,400–25,500 (triangle cap). If the index slips back below 25,000, expect a drift to 24,850, and on further pressure, a retest of 24,550–24,500 at the triangle base.
Ashish Kyal said that the Nifty index has been consolidating on the weekly chart in a range but looks poised to head towards the 25,630 levels. Once the index clears above 25,700, it could confirm a multi-year breakout. Gann levels of 24,728 are expected to hold and should not be retested. Kyal advised traders to use any dips as buying opportunity.
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