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Yesterday, NIFTY opened with a downside gap and started the session below the 23,900 mark. However, the index took support near 23,800 in early trade and thereafter traded in a narrow range of 23,800–23,900. Buying interest at lower levels helped NIFTY recover, and it eventually closed just above 23,900.

NIFTY continues to form lower tops and lower bottoms and is trading below the 10-DEMA and 20-DEMA, indicating continued weakness in the short-term trend. Therefore, we should remain cautious. The index has successfully tested our previously mentioned target of 23,825. If NIFTY starts trading below 23,800, the weakness could intensify, and the index may even test the July low of 23,606.

On the upside, NIFTY has strong resistance in the 24,100–24,200 zone, where the 10-DEMA and 20-DEMA are positioned. Hence, fresh long positions should be considered only on a decisive breakout above 24,200.