Market Outlook for 22 September 2023

Nifty witnessed another gap down opening for the second consecutive day and traded with a negative bias throughout the day. The overall market breadth was weak, and the index ended the day below 19750 with a loss of over 150 points.

Nifty Today:

Nifty has corrected in last three sessions and has retraced 50 percent of the recent upmove. The RSI oscillator has shown a negative divergence on the daily chart as the recent new high in Nifty has not been supported with new high in the oscillator. The negative crossover post this divergence indicates a corrective phase and until we see a positive crossover again, it’s better to stay cautious and avoid aggressive trades. The Nifty has ended the day around the 50 percent retracement support of the recent upmove from 19220 to 20200 and also the 20 DEMA. The hourly readings are a bit oversold and hence, some pullback move could be seen in one or two days. However, the pullback move might see selling pressure at higher levels as the readings on daily are negative. Also if we look at the FIIs data, they have unwound index futures long positions and also have been sellers in the cash segment. On any pullback, the resistance will be seen around the 19880-19950 range. On the lower side, the support below Thursday’s low will be seen around 19600 which is 61.8 percent retracement level.

Nifty gives up 50 percent of recent gains in just three sessions

The Midcap100 index is trading around the crucial support of 20 DEMA which has not been broken in last five months yet. This average support is placed in the range of 40000-39900 and if this is broken, then it could lead to some profit booking in the midcap stocks as well. One should keep a close watch on this support zone and trade accordingly.

Nifty, Bank Nifty Levels and  FINNIFTY Levels: