Two crucial levels for NIfty in the past year and half have been the region between 17750 and 18000. It has taken multiple resistances (red circles) and support as well (green circles) at this specific region. It did the same in the last few weeks as well and is also the 50% retracement area for the current rally from 16747 to 18887. I foresee two possible scenarios playing out in the next week.
Scenario 1: -
Nifty has formed a double bottom at a crucial support area and hence will try to inch up higher. For this to happen, owing to the global cues Nifty needs to open above 18k and in the first 15m/30m needs to sustain above it. The huge Option Selling at 18k CE will then be threatened and then it can move higher. The negatives of this is it is not actually a proper double bottom which often plays out specifically for Nifty where the 2nd higher low is usually some points higher than current low. Fri low was quite close to it. One can see similar pattern in Oct 2022 (orange circle)
Scenario 2: -
Nifty opens below 18k or even close to 17900 then sellers can get the opportunity to sell again and it moves lower and crosses below the last week low. If it does cross, then 17650 and 17564 which is the 61.8% retracement can be the two targets. Unlikely to happen if it crosses above 18k on Mon itself and gives a close above it.
Disclaimer - This is not trade recommendation or advice. This is purely for educational purposes. Do your own research before entering into a trade.
Scenario 1: -
Nifty has formed a double bottom at a crucial support area and hence will try to inch up higher. For this to happen, owing to the global cues Nifty needs to open above 18k and in the first 15m/30m needs to sustain above it. The huge Option Selling at 18k CE will then be threatened and then it can move higher. The negatives of this is it is not actually a proper double bottom which often plays out specifically for Nifty where the 2nd higher low is usually some points higher than current low. Fri low was quite close to it. One can see similar pattern in Oct 2022 (orange circle)
Scenario 2: -
Nifty opens below 18k or even close to 17900 then sellers can get the opportunity to sell again and it moves lower and crosses below the last week low. If it does cross, then 17650 and 17564 which is the 61.8% retracement can be the two targets. Unlikely to happen if it crosses above 18k on Mon itself and gives a close above it.
Disclaimer - This is not trade recommendation or advice. This is purely for educational purposes. Do your own research before entering into a trade.