The recent week in the NIFTY index has witnessed a notable downturn, culminating in a red bearish candlestick. Although there are indications of a potential recovery on lower time frames, there hasn't been definitive technical confirmation yet. For Monday's trading session, two key scenarios stand out:
1. Gap Up Opening Above 22150:
If the market opens with a gap up above 22150, it might hover around the range of 22149 - 22187 initially. A buy trade could be considered if prices find support around 22150 and begin trading above 22190. In such a case, the stop-loss could be set at 22140 with an upside target of 22274 for intraday trading. Short trades are discouraged unless prices drop below 21975 or face rejection after crossing 22275.
2. Flat Opening:
In the event of a flat opening, a buy trade could be initiated with a stop-loss at 21995 (based on a 30-minute candle close). This offers a favorable risk-return profile, targeting levels between 22150 - 22187 and potentially surpassing 22200 towards 22274. Conversely, if prices breach and sustain below 21975, short trades could be considered with a stop-loss at 22035 and targets at 21813 – 21800 – 21753.
3. Gap Down Opening:
Should the market open with a gap down below 21950 but swiftly recover with support around 22937 and commence trading above 22037, a buy trade could be entertained targeting levels at 22149 – 22187 – 22200. Conversely, short trades could be explored if prices persist below 22930 with resistance at 21975, targeting 21813 – 21753.
Conclusion:
If within the first trading hour prices sustain and move above 22120, it could indicate a potential price action move, suggesting a recovery rally towards an initial target of 22274.
Disclaimer: The above analysis is based on technical indicators and past performance, and should not be construed as financial advice. Investors are urged to conduct thorough research and consult with financial professionals before making any investment decisions.