6 Weeks of Falls: Is the Nifty Bounce Real or a Trap?
Nifty has fallen for six straight weeks. Friday showed strong buying from the morning lows, but the overall downtrend remains firmly in charge.
Let us start by looking at the big picture on the monthly chart. Ever since the massive all-time high in January 2026, the market has struggled. Nine months after that top, and five months after the big crash low in April, Nifty is still sitting closer to the bottom than the top. After five months of going nowhere, the market is now slowly rolling downwards again.
When we zoom in to the weekly chart, the picture gets darker. We have now seen six consecutive weeks of red. Last week was not just a small dip; it was the worst week of the entire six-week run, dropping over 2%. The trading range was also the widest we have seen since July. When a downtrend starts getting bigger and wider, it means the bears are getting stronger, not weaker.
The daily chart tells a very simple story of 'lower highs and lower lows'. For five straight trading sessions, every single day's high was lower than the previous day, and every day's low was lower too. Now, Friday felt like a great green day to many traders because the market went up from the morning, but here is the catch: Friday's highest point (23,448.10) failed to cross Thursday's high (23,494.95). The downtrend is untouched.
Let us look closely at Friday's intraday action to understand what really happened. The very first 5-minute candle at 09:15 AM was a total 'flush'. Heavy forced selling pushed the market down 45 points instantly on massive volume, hitting the day's low at 23,231.40. But here is the good news: buyers were waiting there, absorbed all the panic, and price never went back to that low for the rest of the day.
After that morning panic, Nifty climbed steadily for five straight hours. This was not a crazy, fast short-covering rally, but a disciplined climb. The market held onto its gains and closed well above its average price for the day (VWAP). However, during the post-market closing auction, the price was pushed down a bit by sellers, showing that the bears are still hovering around.
As your Trading Baniya, here is how I read these charts: one strong day inside a six-week fall is just a bounce, nothing more. Until the market actually breaks out of its pattern of making lower highs, the bears are running the show. We must respect Friday's strength, but we cannot trust it blindly until it proves itself.
Looking at the live market context, the outside world is adding to our local chart weakness. FIIs continued their selling on Friday, pulling out Rs 930 crore, though our domestic funds (DIIs) stepped up as usual to buy Rs 1,968 crore and save the day. Bank Nifty and IT stocks showed some great muscle, which is why the market did not collapse further.
However, global tensions are keeping the pressure heavy. With the situation in the Middle East escalating, Brent crude oil briefly shot past $104 to $108 per barrel. For India, expensive oil means higher inflation fears, which makes big investors nervous, even if the US markets managed to close in the green last week.
What does all this mean for a regular retail trader? It means you must be very cautious. Do not jump in and buy heavy quantities just because you saw one green candle on Friday. In a strong downtrend, these small bounces are often traps designed to catch eager buyers before the market falls again.
Since Monday is a holiday, all eyes will be on Tuesday. The line in the sand is very clear: watch Thursday's high of 23,494.95. If Nifty crosses and holds above this level, the lower-high sequence breaks, and we can finally talk about a real reversal. But if it stays below this level, treat everything as just a bounce inside a falling market. Do not guess the bottom, let the market prove it to you!
- Nifty has fallen for 6 consecutive weeks, with the latest week being the most damaging.
- Friday saw a strong 216-point recovery from morning panic lows, driven by Bank Nifty and IT.
- Despite the bounce, Friday failed to cross Thursday's high, keeping the daily downtrend fully active.
- FIIs sold Rs 930 crore, but DIIs supported the market with Rs 1,968 crore in buying.
- High crude oil prices (above $104) due to Middle East tensions remain a big headache for Indian markets.
- Tuesday's crucial level is 23,494.95; only a break above this turns the bounce into a true trend reversal.
Prepared by Nitish Goyal, SEBI Registered Research Analyst (INH000025993), under EquityMuni / Trading Baniya. For educational purposes only and not investment advice. Investment in securities market are subject to market risks; read all related documents carefully.