Nifty Outlook - 16 Dec-2022

The global markets did not react much to the Fed event and hence our markets started the day on a negative note. The indices corrected sharply in the later part of the day and ended around 18400 with a loss of almost 250 points.

Nifty Today:

Our markets had recently seen some consolidation from the start of the December month. Post the 2000 points upmove, Nifty entered a corrective phase, but it managed to form a support around the 23.6 percent retracement of the rally. However, the banking index kept outperforming and stretched higher due to which the momentum readings on the daily charts entered the overbought zone. Such overbought set ups usually lead to a corrective phase and since the major events were behind now, traders chose to unwind long positions which led to the start of a corrective phase in Bank Nifty as well. Now on the daily charts, the RSI oscillator for both Nifty as well as Bank Nifty have given a negative crossover indicating a corrective phase. Hence, one should not be in a hurry to do bottom fishing as if this correction turns out to be a price wise correction, then we could see some decent downmoves in the near term. For the Nifty index, 18350 would be the immediate support to watch as it is the swing low and the retracement support. If this is breached, then Nifty could correct towards 18150-18100 in the short term. On the flipside, 18600-18700 would not be seen as the important resistance zone.

Market momentum turns negative on the weekly expiry day

The Bank Nifty index which was the leader in the recent upmove too has overbought setups on the daily chart. The readings have now given a negative crossover and hence we could see further correction. The immediate support levels to watch out for in the Bank Nifty index would be 43140 first (20 DEMA) followed by 42570 (retracement support).

Nifty & Bank Nifty Levels: