Market Outlook for 22 February 2024

Ahead of Nifty’s weekly expiry, the index consolidated in a range for initial couple of hours, but it witnessed selling pressure in the later part of the day and corrected to end the day around 22050 with a loss of over half a percent. However, the Bank Nifty index relatively outperformed the Nifty and managed to close above the 47000 mark.

Nifty Today:

In last couple of sessions, Nifty had attempted to surpass the previous highs and resume the broader uptrend. However, Wednesday’s move indicates an attempt by the bears to fight back as the index has not shown follow-up strength yet. On the daily chart, the index has formed a ‘Bearish Engulfing’ pattern wherein the previous day's price action has been engulfed into the later one and it is a trend reversal pattern. Thus, although it seemed that the market could resume its uptrend post the recent consolidation, we are not out of the woods yet and the follow up move will be important to see in the next couple of sessions.

The immediate support for the Nifty on the lower time frame chart is placed around 21920 which is the important level to watch. A close below this support would mean a breakout failure for the Nifty and that could then lead to unwinding of long positions. In such a case, we could see a correction towards the 40 DEMA which is placed around 21620. On the higher side, the high of 22200-22250 will be seen as the hurdle which needs to be surpassed for a continuation of the uptrend.

                                                     Bears attempt to restrict market upmove

Traders are advised to keep a close watch on the above levels and see how the index moves in next couple of sessions. A close below 21920 should be the trigger point to exit from trading long positions. 

Nifty, Bank Nifty Levels and  FINNIFTY Levels: