Nifty Outlook - 6 Dec-2022

Nifty traded in a narrow range on the first day of the week but it recovered from the morning low which was just below 18600 and recovered gradually to end the day on a flat note around 18700. 

Nifty Today:

Nifty has seen some correction in the last three trading sessions from the high of 18880 to around 18600. This primarily was on expected lines as the momentum readings on Nifty hourly charts were significantly overbought. The overbought readings have cooled off post this correction in Nifty, but the Banking index which is relatively outperforming is still in the overbought zone. However, both the indices have not broken their immediate supports and hence, it seems more of a time-wise correction as of now. Until the indices break their important supports it's better not to preempt any reversal. There are several events this week such as Gujarat Elections and the RBI Monetary Policy which could lead to the next directional move in the indices. Hence, one should keep a close watch on the traders reaction to the events outcome which would dictate the near term trend. The immediate support for Nifty placed around 18550 which is the trendline support, followed by the 20- day EMA support around 18400. If the index manages to hold these supports, then another leg of up move could be seen towards 18900-19000 range.

Gujarat Elections and RBI Policy outcome could direct short term moves

 The broader markets continued to outperform as a lot of buying interest is visible in individual stocks. Traders should continue with a stock specific approach where better trading opportunities are seen.

Nifty & Bank Nifty Levels: