Nifty RSI rarely ventures into Oversold zone (RSI <30). The last time that it happened was in 2020 during Covid crash and it generally comes back above within a few days. Most of the time it bounces back as it reaches near OS zone.
Currently it is forming a double bottom or W pattern with higher low last seen near Sep/Oct 2022. In that case though W was quite distinct with a good green candle of Bullish Engulfing on 30 Sep 2022 and a higher low of about 60-70 odd points. Right now it is forming a similar pattern also on RSI but is not quite similar in terms of number of points. So chances of failure are more.
If it has to move higher then either a decent gap up or a good 15m/1hr hammer candle is required and crossing of 17450 would indicate break of neckline and accelerated movement till atleast 17600.
But there is a good chance of it moving down lower as well because of FII bearish positioning in Options and Futures and global cues such as movement higher in yields across tenors everywhere in the world (US, Europe or India) plus global inflation cues now accelerating again with large upside surprise in Europe inflation data today. So if it does not show bullish movement at the start of the morning a breakdown of 17260 could lead to Nifty going towards 17100 which is the gap support.
It is very possible that we will see some sort of decisive movement tomorrow with upside of 17600 and downside of 17100.
Happy Trading and Best of Luck!!
Disclaimer - This is not trade recommendation or advice. This is purely for educational purposes. Do your own research before entering into a trade.
Currently it is forming a double bottom or W pattern with higher low last seen near Sep/Oct 2022. In that case though W was quite distinct with a good green candle of Bullish Engulfing on 30 Sep 2022 and a higher low of about 60-70 odd points. Right now it is forming a similar pattern also on RSI but is not quite similar in terms of number of points. So chances of failure are more.
If it has to move higher then either a decent gap up or a good 15m/1hr hammer candle is required and crossing of 17450 would indicate break of neckline and accelerated movement till atleast 17600.
But there is a good chance of it moving down lower as well because of FII bearish positioning in Options and Futures and global cues such as movement higher in yields across tenors everywhere in the world (US, Europe or India) plus global inflation cues now accelerating again with large upside surprise in Europe inflation data today. So if it does not show bullish movement at the start of the morning a breakdown of 17260 could lead to Nifty going towards 17100 which is the gap support.
It is very possible that we will see some sort of decisive movement tomorrow with upside of 17600 and downside of 17100.
Happy Trading and Best of Luck!!
Disclaimer - This is not trade recommendation or advice. This is purely for educational purposes. Do your own research before entering into a trade.