Weekly Market Outlook for 25 September to 29 September

Our markets witnessed a sharp correction in the week gone by as the Nifty ended in the red on all trading sessions and ended below 16700 with a weekly loss of over two and a half percent.

Nifty Today:

At the end of the previous week, Nifty registered a new record high of 20200 and just within a week, the index has breached 19700 level and ended below it. Post the mid-week holiday, the sentiments turned negative for the markets as the global markets corrected and the FII’s unwound their index futures long positions. They have also been sellers in the cash segment and all these factors led to a correction in our market. The RSI oscillator gave a negative divergence at the high as the recent new high in the index was not confirmed by a new high in the RSI and hence, the momentum turned negative and markets entered a corrective phase. Until we see any change in the data again, the short term trend remains corrective and hence, one should trade with a cautious approach in the near term. The immediate support for Nifty is placed around 19600 which is the 61.8 percent retracement of the recent upmove from 19220 to 20200. A pullback could be expected from this support as the momentum reading on the lower time frame charts are oversold, but pullback moves could see selling pressure at higher levels. The immediate resistance in Nifty on pullback moves will be seen around 19800-19870. While the above mentioned retracement support will be the key level at the start of the week, if that gets breached then one can expect the extension of correction towards 19435. Traders are advised to avoid aggressive positions as volatility could be on the rise in the coming September series expiry week.

Weak cues from global markets and FII’s selling resulted in sharp sell-off in markets

The Nifty Midcap index has ended at its crucial 20 DEMA support which has not yet been broken since the start of the uptrend (since April 2023). The important support is placed at 40000-39900 range and any close below this support zone could lead to profit booking in the midcap stocks. One should keep a close watch on these support levels in the coming week.

Nifty, Bank Nifty Levels and  FINNIFTY Levels: