Nifty's bounce back was impressive but the breakout could not sustain

On Tuesday of last week, Nifty experienced a significant decline and broke out of the consolidation zone, activating a sell signal according to our spreadsheet below 23851. Nifty ended the day at 23824, affirming the bearish trend. Nonetheless, this weakness did not persist the next day, as Wednesday saw a strong rebound with Nifty recovering nearly all of the previous day's losses.

The stop loss for that day's bearish move was set at 24078.60, and the Nifty spot actually exceeded this level, reaching a daily high of 24090.05. However, the stop loss held on a closing basis as the Nifty dropped towards the end of the session, closing at 24021.65.

This suggested that the bearish pressure might still persist. However, on Thursday, Nifty gained more strength and not only decisively surpassed the pre-calculated stop loss for that day, set at 23998, but also stayed above it consistently. This confirmed the end of the bearish trend. Nifty surpassed the bullish trigger for the day at 24106, but significant selling pressure towards the session's end pushed it back below that trigger, closing the week at 24056.

This has resulted in an uncertain situation. The bearish trend observed on Tuesday has ended, yet new bullish momentum is absent. For Monday, 29th June, the bullish and bearish triggers are 24168 and 23870, respectively, on a closing basis. We are currently not engaged in any trades and are waiting for the July series to start on 1st July. Due to the recent geopolitical tensions, it appears challenging for Nifty to close above the bullish trigger during the current month's series.

Cheers and happy trading.