The Nifty saw sharp intraday swings on Monday, covering a range of 224.70 points before settling in the green above 22,550.
The index began the session on a positive note and touched 22,621.80 within the first hour. That level, however, remained the day's peak as selling pressure emerged soon after. The Nifty erased most of its early gains and slipped below 22,400 during the session.
Sentiment improved in the latter half of the day, with buying at lower levels helping the index recover more than 150 points from the intraday low. The rebound was strong enough to push the Nifty back above 22,550 by the close.
Candle Structure Shows Two-Way Volatility
Monday's session produced a small bullish real body with long shadows on both sides, giving the candle the characteristics of a high-wave pattern.
This type of price action points to a lack of clear control between buyers and sellers. Since the pattern has appeared after a prolonged decline, it may suggest that selling pressure is beginning to lose some strength. Even so, one session is not enough to confirm a reversal and the next move will be important.
The Nifty also managed to hold above the previous session's low and formed a higher high as well as a higher low. That is a mildly positive short-term development, although the index still failed to close above the previous day's high.
Nifty Sustaining Above 22,622 Could Improve the Setup
The immediate hurdle is Monday's high of 22,622. A close above this level would improve the short-term structure and strengthen the case for a recovery.
If the index sustains above 22,622, the 8-day EMA near 22,779 could emerge as the next resistance and immediate upside level to watch.
A weak or negative close in the next session, however, would take some strength away from Monday's recovery and reduce the relevance of the high-wave formation.
Nifty Weekly Expiry: 22,217 Remains a Key Support
On the lower side, last Thursday's low of 22,217 remains an important support for the short term. Holding above this level would keep the recovery possibility open.
A decisive move below 22,217 would weaken the current setup and once again tilt the near-term structure in favour of sellers.
RSI Remains in the Oversold Zone
The 14-period daily RSI continues to trade below 30 despite Monday's pullback recovery, which means momentum remains in oversold territory.
This shows that the broader short-term momentum is still weak. A move back above the oversold zone, along with a close above 22,622, would offer better confirmation that the index is beginning to regain strength.
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