Nifty Signals Strong Recovery: Bullish Double Bottom in Play – Key Trading Strategy Revealed by HDFC Securities

A long bullish candle appeared on the daily chart, suggesting that the market might be ready for an upward bounce. Nifty seems to be forming a “double bottom” pattern around the 24,700 level, but this needs to be confirmed with more upward movement. Although the index closed below its 50-day exponential moving average (DEMA), it showed a strong recovery.

Tuesday’s upward movement could encourage the bulls to make a comeback. If the index sustains its upward trend, it could confirm a short-term bottom reversal pattern. A decisive move above 25,000 could open the door to the next resistance range of 25,400-25,500. Immediate support is at 24,700, according to Nagaraj Shetti of HDFC Securities.

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In open interest (OI) data, the highest OI on the call side was seen at the 25,000 and 25,200 strike prices, while on the put side, the highest OI was at 25,000, followed by 24,800.

What Should Traders Do? Here’s What Analysts Say:

Hrishikesh Yedve, Asit C. Mehta Investment Intermediates:
On the daily chart, Nifty formed an “inside bar” candlestick near the short-term trendline support and a previous demand zone. As long as the index stays above 24,690, levels between 25,150 and 25,350 are possible. A “buy on dips” strategy could be a good approach for short-term investors.

Rupak De, LKP Securities:
Nifty formed a “bullish harami” pattern on the daily chart, signaling rising optimism. The index has also moved above a key moving average on the hourly chart, and the RSI (Relative Strength Index) has made a bullish crossover, which adds to the positive outlook. In the near term, Nifty could rise to the 25,350–25,400 range. Support is at 24,850, and a break below this level could lead to weakness.

Praveen Dwarakanath, Hedged.in:
Nifty has shown a slight bounce from its low of 24,800, but it hasn’t yet closed above the previous day’s high, indicating weakness may continue. Momentum indicators have recovered from oversold levels, but the ADX (Average Directional Index) is still showing signs of weakness. Traders can take a bullish stance only if Nifty closes above 25,300. Until then, the index could be sold when it rises. Data from options writers showed significant call writing at the 25,000 level, suggesting ongoing weakness.