Nifty headed for W-shaped reversal, expect selling pressure near 23K: Anand James
Mar 10, 2025, 04:27 IST
As a majority of pullbacks from sub-25 RSI levels have seen a reversal soon in previous instances, we can expect a W-shaped reversal in Nifty this time as well, says Anand James, Chief Market Strategist at Geojit Financial Services.
He added that Nifty is likely to experience renewed selling before reaching 23,000 or shortly after hitting 23,000, followed by a retest or break of 22,000 again, before another sustainable uptrend begins
Nifty Headed for W-Shaped Reversal, Expect Selling Pressure Near 23K: Anand James
The Nifty 50 index is showing signs of a W-shaped reversal, and traders should brace for potential selling pressure around the 23,000 level, according to Anand James, Chief Market Strategist at Geojit Financial Services. He believes that the market is currently in a phase where sharp movements in both directions are likely before a clearer trend emerges.
W-Shaped Reversal in Play
A W-shaped pattern in technical analysis refers to a scenario where the index undergoes a double-bottom formation before rallying. This pattern often signals market indecision and volatility. According to James, the recent movements suggest that Nifty might retest its support levels before making a decisive move upward.
“While there is an upside potential in the near term, 23,000 will act as a strong resistance level where profit booking or renewed selling pressure could emerge,” said James.
Key Support and Resistance Levels
James highlights 22,000 as a crucial support zone. If Nifty breaches this level, it could trigger further downside movement before finding stability. On the upside, a sustainable breakout above 23,000 could open the doors for further gains, but until then, traders should remain cautious.
Support Levels: 22,000 – If Nifty falls below this, a deeper correction could be expected.
Resistance Levels: 23,000 – Selling pressure could emerge at this level.
Market Trend Outlook
The broader market structure suggests that Nifty is still in a consolidation phase. Experts point out that for a true trend reversal, the index must surpass the previous lower high, which is around 23,807. Until then, the market is likely to remain volatile with both rallies and corrections occurring frequently.
Investor Strategy
Given the current market scenario, analysts suggest that traders adopt a cautious approach. Short-term investors might look for opportunities near the support levels, while long-term investors should wait for confirmation of a breakout before making significant investments.
With global market trends, inflation concerns, and geopolitical events playing a role, investors should closely monitor key levels and adjust their strategies accordingly.