Nifty Outlook - 22 Nov-2022

The negativity in the Asian markets led to a gap down opening in Nifty which started the week below 18250 mark. The index corrected in the first half an hour and then consolidated within a narrow range throughout the day to end tad above 18150 with a loss of eight-tenths of a percent.

Nifty Today:

During last week, our markets had consolidated within a narrow range and the rangbound trading continued post the negative opening at the start of the week. The market breadth was negative which indicates lack of stock specific participation too. However, the Banking index relatively outperformed the benchmark index. The momentum oscillator on the daily chart of Nifty has given a negative crossover indicating lack of momentum; however the index has a crucial support around 18000 as it marks the 20 DEMA and the recent swing low support. With monthly expiry nearing, it would be crucial to watch whether traders rollover their long positions to the next series going ahead and whether the Nifty index holds on to this crucial support. Till this support is intact, it could be seen as a time-wise correction within a short term uptrend. But the market breadth is not improving as some of the sectors including the midcap index have shown divergence and a lackluster movement. For this divergence to end, the midcap space and the broader markets should witness buying interest and if that does not happen, then it could be a setback for the benchmark as well. Hence, at current juncture it is better to be on the sidelines and have a wait and watch approach. Once the broader markets and the benchmark gets in sync with each other in either direction, it will give more clarity for directional traders.

Lackluster movement in index continues as broader markets diverge

The immediate supports for Nifty are placed around 18080 and 17970 while resistances are seen around 18260 and 18330.

Nifty & Bank Nifty Levels: