Market Outlook for 25 October 2023

Our markets corrected sharply in the first trading session of the week as the negative global cues continued to weigh negatively. The Nifty broke its important supports one after another as the broader markets witnessed significant selling pressure and the index ended the day below 19300 with a loss of over 250 points. 

Nifty Today:

The week started with a continuation of the corrective phase, but this time it’s not only the benchmark index but the broader markets (midcaps and small caps) too witnessed selling pressure. Nifty broke its important swing low support of 19330 and ended well below it. However, the data was already bearish since sometime as the recent pullback move did not see any significant short covering or long formations. The short positions by FIIs are intact in the system with around 75 percent positions on the short side. The RSI oscillator gave a negative crossover in Nifty last week hinting at losing momentum. Thus, until the data changes, we continue with our cautious approach on the market and advise short term traders to avoid aggressive trades. The major support zone for Nifty is now placed in 19000-18900 range and in case the index approaches this zone then one can look for some contra trades. On the higher side, 19400-19500 will now be seen as the immediate resistance zone on any pullback moves.

Nifty breaks important supports, sell-off in broader markets

The Midcap and the small cap index corrected sharply and both the indices breached their crucial supports. Although the mid to long term trend remains positive, the momentum in the short term could continue to be negative.  

Nifty, Bank Nifty Levels and  FINNIFTY Levels: