Nifty: A Double Top in the making?

This week is important for Nifty, if it breaks 25690 decisively (on a weekly basis), it would have closed 3 weeks down breaking an important gap up area formed on 11th November 2025 and a weak channel as wave (b) – shown in below chart.

Nifty RSI is diverging from price action. While the RSI has made a double top (downward bias), Nifty has chugged along with lots of hesitation in the middle.

Broader markets have remained weak leading the pack are Media, CPSE, PSE, Small Caps & Energy. While Nifty has managed a 4% return since Oct 1st 2025, with strength in IT, Banks Oil&Gas, Infra and Midcaps.

For Medium Term outlook 25600 is important where the Weekly WMA21support sits.

While the Elliott Wave count may suggest revisiting of the 21,900 we are far from it, with support in the region of 24,400. A monthly break of that level will open up the downside.

Off course if Nifty manages to stay above 25,600 we chug along to all time new highs, however I would maintain caution as the structure looks weak. The only thing that can save the Nifty is the so called “Reflation Trade”, where governments around the world Monetize debt. They will print and print, so that the inflation eats into the debt repayments, leading to increase in the nominal prices for various asset classes.

I will be honest, I do not know much about the Debt Monetization. Is it happening or if it is, when will it happen! However I do know that the governments would be cautious of not repeating the 1970’s stagflation scenario and they can’t be so blatant about it either. Loss of investors confidence in the bond market is something no government would want to risk.

However lets leave the narratives to the “experts” and we shall focus on the price action. Its a game of probabilities and for now the price action of Nifty looks weak and far from a spring ready to jump. I place my bets on weakness provided key levels are taken out.