Market Outlook for 20 February 2024

Nifty started the week on a positive note as it surpassed the previous swing highs during the day and marked a new record high of 22186. It gave up some of the intraday gains towards the end, but managed to end the day above 22100 with gains of about four-tenths of a percent.

Nifty Today:

In last one month, Nifty has gone through a time-wise corrective phase where the index resisted in the 22150-22100 range twice. However, the intermediate declines from that hurdle were not that sharp as the index took support around the 40 days EMA and resumed its upmove. The index has formed an ‘Ascending Triangle’ pattern and is on the verge of a breakout. Thus, the follow up move in the next few days will be important if the index sustains at higher levels, then it would result in a continuation of the uptrend.

In such a scenario, the retracement measurement hints at potential targets of 22500 in the Nifty. In the derivatives segment, 22000 strike put option in the current weekly series has the highest open interest outstanding indicating it to be the immediate support. FII’s have reduced some of their net short positions in the last few days, but still more than 60 percent of their positions are on the short side. Since the index has resumed the momentum, if they cover the short positions then that could be supportive as well for a continuation of the upmove in the index. 

                                               New record for Nifty as index surpasses previous high

The follow-up move will be important in the next few sessions as if the index fails to show strength above the previous highs, then it could result into a continuation of the consolidation.

Nifty, Bank Nifty Levels and  FINNIFTY Levels: