The GIFT Nifty 50 index hovered near 24,330 on Monday, testing a major resistance cluster that spans 24,347 to 24,411, a band defined by the 50-day simple moving average, the Ichimoku cloud top, and the 38.2% Fibonacci retracement level.
Technical indicators showed mixed signals as the index approached this supply zone. The MACD line recently flipped positive, signaling a bullish crossover, while the Relative Strength Index stood at 52.2, indicating neutral to slightly bullish momentum. The Average True Range remained subdued at 69 points, or 0.28%, reflecting low intraday volatility. On the 5-hour chart, the price remained below both the SMA 50 and the Ichimoku cloud, with a Doji candle forming near resistance, a pattern often associated with indecision.
A near-complete bear flag pattern, estimated at 80% completion, suggested potential downside risk if the index failed to clear the resistance zone. The index’s proximity to the 24,350 level, described as a no-trade chop zone, further underscored the indecision in the market. Key support was identified at 24,100, a level that has provided three prior bounces, while the 24,400 zone had repelled advances four times, reinforcing its significance as a technical barrier.
Traders evaluating bearish scenarios were eyeing a potential rejection at 24,350, with a stop-loss set above 24,450 and downside targets at 24,150, 23,950, and 23,750, offering risk-reward ratios of 2:4:6. Conversely, a bullish breakout above 24,390 could target 24,640, 24,800, and 25,000, with risk-reward ratios of 2:3.45:5.27, though confidence in this scenario was noted as low.
Invalidation for the bearish thesis would occur with a sustained move above 24,420, while a fast but unsustained push through 24,400 without volume could signal a bull trap. The index last traded at 24,334.50, up 46 points or 0.19% on real-time data from August 21.
