Nifty50: Bearish Momentum Slowing – Signs of a Possible Reversal

The Nifty 50 index has been in a strong bearish trend, forming consecutive lower highs and lower lows on the 5-minute timeframe. However, recent price action suggests that selling pressure might be exhausting, with signs of a potential reversal emerging in the discount zone. While the broader trend remains bearish, there are early indications that buyers may attempt to regain control.

A key observation is the presence of a weak low near the current price level. This could indicate that liquidity has been grabbed, setting the stage for a possible reversal. Additionally, multiple change-of-character (CHoCH) formations are appearing, which often signal a shift in market structure. While these signals alone do not confirm a bullish reversal, they suggest that the downtrend is losing strength.

Price is currently positioned within the discount zone, an area where institutional buying interest typically increases. A key area of interest has formed near 22,100 – 22,070, where demand could emerge. If buyers manage to push the price above 22,200 and sustain it, this could indicate an initial attempt at reversal. Further confirmation would be required above 22,250 – 22,300, where a stronger shift in momentum could lead to a move toward the 0.618 Fibonacci retracement level at 22,385. If this level is reclaimed, a bullish push toward the 22,500 – 22,600 resistance zone could follow.

On the other hand, the risk of bearish continuation remains if price fails to hold above 22,100 and breaks below 22,070. This scenario would likely lead to further downside, with potential targets at 22,000 or lower. If CHoCH formations do not come with strong volume confirmation, there is a possibility that the market is simply grabbing liquidity before another downward move.

From a trading perspective, an aggressive long entry could be considered if the price confirms a CHoCH above 22,200, with potential targets around 22,300 – 22,385. A more conservative approach would be to wait for a breakout above 22,385, confirming a stronger shift before targeting the 22,500+ zone. However, if price breaks below 22,100, it would indicate a bearish continuation, and short positions could be considered toward 22,000 – 21,950.

The market is showing early signs of a potential reversal, but confirmation is crucial before committing to a bullish outlook. If buyers step in above key levels, a move toward equilibrium and premium zones may follow. However, if price fails to sustain above the key demand zone, selling pressure could resume. Traders should carefully watch for confirmations before positioning themselves for either direction.