Nifty Trade Setup for October 6: Nifty Reclaims 22,550 After Sharp Selloff, Can Bulls Extend the Recovery?

The Nifty 50 staged a recovery on October 5 after the previous session’s sharp decline, closing at 22,555.75, up 133.80 points or 0.60%. The index traded between 22,397.10 and 22,621.80, showing buying interest near the lower levels. The recovery was supported by easing crude prices and improved global sentiment, although the broader trend remains weak after eight consecutive weekly declines.

Market Breadth Turns Positive as Nifty Recovers 

Market breadth remained positive, with 32 stocks advancing and 18 declining out of the Nifty 50 constituents. FMCG, Consumer Durables and Infra were among the leading sectors. The broader participation along with Nifty’s 0.60% recovery suggests that buying interest was not limited to a handful of stocks, providing some support to the ongoing short-term rebound. 

Nifty Technical Setup: Recovery From Support, But Major Resistance Still Intact

On the daily chart, Nifty 50 recovered from an intraday low of 22,397.10 and closed at 22,555.75. The index has moved back above the 22,221.85 support, which is an important level for the near-term structure. However, Nifty is still trading below the major EMA cluster, with the 22,822.66 level acting as the first important dynamic resistance. The earlier breakdown below 23,076.90 also continues to keep the broader trend under pressure.

The hourly chart shows some improvement as Nifty has reclaimed the short-term EMA around 22,511.41, while the 22,556.97 EMA is now the immediate hurdle. A sustained move above this zone could strengthen the recovery towards 22,757.35 and then 23,076.90. On the 15-minute chart, the index is trading above its short-term EMA cluster, indicating that intraday momentum has turned positive.

Momentum Indicators Show Recovery, But Daily Trend Remains Weak

The daily RSI stands at 28.15, remaining below the 30 mark and indicating that the index is still in an oversold zone. While this increases the possibility of a relief bounce, it does not by itself confirm a durable reversal. The hourly RSI has improved to 46.74, while the 15-minute RSI is stronger at 58.71, showing that short-term momentum has recovered from the recent lows.

Key Levels to Track for Nifty

For the October 6 session, 22,221.85 remains the crucial downside support. As long as Nifty holds above this level, the recent recovery can extend towards 22,757–22,823, followed by the major resistance at 23,076.90. On the downside, a break below 22,397 could bring renewed selling pressure and expose 22,221.85. For a stronger trend reversal, Nifty needs to reclaim and sustain above 23,076.90.