📈 Nifty50 Daily Chart Analysis
Trading Strategy & Market Psychology for Monday — 27 October 2025
The Nifty50 showcased a small pullback after its recent strong rally, ending Friday at 25,795 with a mild decline. While a single red candle doesn’t change the overall bull market structure, it provides a message from the market: Investors are cautious near major resistance levels. This situation offers traders both opportunity and risk — and a chance to understand how to act smartly when the market pauses after a rally.
🔍 What the Chart is Telling Us
✅ Primary Trend: Still Bullish
Prices are comfortably above the 20-, 50-, 100-, and 200-day EMAs — which is like driving above all key speed breakers without slowing down. This indicates that big players (FIIs/DII) are still positive on the market.
⚠️ Resistance Ahead
A supply zone is visible around 26,250 – 26,400. The index has touched this zone and pulled back — meaning sellers are still active here.
📉 Momentum Cooling Down
RSI is retreating from overbought zones. This suggests the market may:
- Consolidate sideways, OR
- Correct slightly before resuming the uptrend
🔄 Volumes Shrinking
Rising prices on decreasing volume often hint at:
“Buyers are pausing before taking the next big step.”
🎯 Practical Trading Strategy for Monday
Market is bullish — but not at a level where chasing prices blindly will reward traders.
The smart move: Buy dips instead of breakouts.
🟩 Trade Plan 1: Buy the Dip (Preferred Strategy)
| Parameter | Levels |
| Buy Range | 25,650 – 25,700 |
| Target 1 | 26,050 |
| Target 2 | 26,300 |
| Stop Loss | 25,500 |
📌 Why This Works?
20-EMA is acting as a strong support. A bounce from this area would mean buyers are still fully in control.
📌 Add-on Strategy:
If price crosses 26,050 with rising volume → Trail S/L to 25,800 and ride towards the resistance zone again.
🟥 Trade Plan 2: Sell the Breakdown (Risk-Control Strategy)
| Parameter | Levels |
| Sell Trigger | Below 25,500 |
| Target 1 | 25,300 |
| Target 2 | 25,150 |
| Stop Loss | 25,720 |
📌 When to Execute?
Only if the market shows a decisive break — heavy red candle + volume spike. Breakdown without volume = fake breakdown.
🧠 Trader’s Learning Corner
(Why This Strategy Makes Sense)
✔️ Trend is King — We trade with the major trend, not against it
✔️ Buying dips in an uptrend gives better risk-reward
✔️ Breakouts near resistance zones often trap impatient traders
✔️ Stop-loss is non-negotiable — volatility near resistance is high
A successful trader doesn’t predict — they react to price behaviour.
🔔 Key Levels to Watch
| Levels | Why They Matter |
| 26,250 – 26,400 | Major supply zone — profit booking likely |
| 25,650 – 25,700 | Strong support + fresh buying zone |
| 25,500 | Breakdown confirmation — sentiment weakens below |
A sustained close above 26,400 could start a fresh breakout rally for new highs.
📌 Expert View — My Honest Take
Even though the bull run is intact, the risk-reward for fresh long trades above resistance isn’t favorable.
Let Monday decide the direction.
If market dips → Buy confidently
If market breaks supports → Turn cautious and play short-term shorts This approach keeps traders aligned with momentum and protected against traps — the true formula for market survival.
Disclaimer
The views and analysis provided above are for educational and informational purposes only and should not be considered as financial or investment advice. Trading and investing in the stock market involve risk, and past performance does not guarantee future results.
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