Nifty 50 Analysis – Key Support Zone HoldsThe Nifty 50 Index is currently testing a critical support zone near the 24,450–24,500 level, which has historically acted as a strong base for multiple reversals. As visible on the chart, price action has formed a series of lower highs and lower lows, but recent candles show buyer defense around this support, hinting at a potential bottom formation.
Structure Breakdown
Over the past few sessions, Nifty has been in a short-term downtrend, trading consistently below the 200 EMA, which confirms the bearish pressure. However, price is now at a make-or-break support level, which has been respected multiple times over the past two months.
A potential W-shaped bottom pattern (double bottom or inverse head & shoulders-like) seems to be forming, which could signal a bullish reversal if the neckline (near 24,850–24,900) breaks convincingly.
Bullish Possibility
If the support holds and price breaks above 24,900, we may see a trend reversal or at least a relief rally. The possible upside targets include:
First Target: 25,100
Second Target: 25,350
Swing Target: 25,600+
The move may be sharp if shorts start covering and fresh buying enters on confirmation. A successful reclaim of the 200 EMA will strengthen the bullish structure.
Bearish Breakdown Possibility
On the flip side, if price fails to hold above 24,450 and we get a candle close below this zone, the bullish reversal setup will get invalidated. This could open room for:
Downside Target 1: 24,200
Downside Target 2: 23,950
Extended Target: 23,700 zone (last swing low)
In this scenario, bears regain full control, and the overall downtrend from July could continue deeper.
Risk Factors for Both Sides
News Event Risk: Any macroeconomic event (like inflation data, RBI policy changes, or geopolitical developments) could trigger volatility and invalidate patterns.
False Breakouts: Watch for fake moves above resistance or below support. Always wait for confirmation candle close.
Gap Open Risk: Overnight global market moves can trigger gap-ups/downs, skipping stop-losses.
Trader Suggestions
- Wait for confirmation before entering long above 24,900 or short below 24,450.
- Use tight stop losses as volatility near key levels can result in whipsaws.
- Avoid heavy positions in this uncertain phase unless breakout or breakdown confirms.
- Keep watching for volume and price momentum for signs of real conviction.
- Option traders may explore straddle/strangle near this tight range, if expecting a sharp move.
Final Word
Nifty is at a crucial turning point. The support zone has worked like a wall so far—but whether it leads to a reversal rally or a breakdown will depend on how price reacts in the next 1–2 sessions. Trade with a clear plan, and adapt quickly based on market behavior.
