Nifty Outlook - 20 Dec-2022

Post the weak closing during last week, Nifty started the new weak on a flat note but witnessed a pullback move during the day. The index crept higher with support of some or other heavyweights and ended the day above 18400 with gains of over eight-tenths of a percent.

Nifty Today:

During last week, Nifty corrected and breached its important ’20 DEMA’ support as the momentum weakened due to profit booking from stronger hands. However, the correction from swing high of 18888 to 18255 in Friday’s session led to oversold setups on the Nifty hourly charts. The readings on the hourly charts gave a positive crossover in the morning which led to the pullback move during the day. Now, the set ups on the daily charts still are not much positive and hence, we continue with our view that the markets have entered a corrective phase after posting highs on 1st December. But when some sector rotation takes place, there is a possibility of corrective phase turning to be a time-wise correction where rallies towards the resistances are sold into while declines towards supports witness buying interest. Hence, we do not expect a run-up rally in the short term on the indices and hence, upmove towards resistances should be used to lighten up trading longs. The immediate resistances for Nifty are seen in the range of 18470-18500 followed by 18600 levels. On the flipside, 18250 and 18134 are the near term supports for the index.   

Nifty shows a pullback move post last week’s sell-off

Traders should avoid chasing the index after the upmove and rather look to lighten up longs around mentioned resistance. A stock specific approach shall be a better approach to trade in the markets for the time-being.

Nifty & Bank Nifty Levels: