Nifty Outlook - 19 August 2022

The index traded within a range on the weekly expiry day, but we witnessed some intraday volatility within the range and the Nifty ended the session marginally positive.

Nifty Today:

The indices witnessed some profit booking from the higher levels in the first half of the day , however the intraday correction got restricted around the hourly ’20 EMA’ support and the index recovered from the lows in the later part of the day. 
 

Nifty holding its short term supports in intraday declines

So the important short term supports are held on intraday dips and until we see any close below the same, the near term trend still remains up. However, the ‘RSI Smoothed’ oscillator has given a negative divergence on the lower time frame chart in the overbought zone which the first sign of caution. In the near term, if the index continues this upmove and the readings do not post new highs, then this could then lead to some negative divergences. Traders should keep a watch on the same and wait for crucial supports to get breached for taking any contra trades. The immediate supports in Nifty are now placed around 17850 and 17770 and close below these would be signs of reversal. Until then, we continue with our advice for traders to trade with a stock specific approach with reduced position size. 

Nifty & Bank Nifty Levels: