Nifty Outlook for 16 June 2023

Nifty started the day on a flat note, but it failed to surpass the hurdle of 18800. The index resisted around the previous swing high zone of 18780-18800 and corrected to end the day below 18700. However, the selling pressure was mainly seen in the Bank Nifty index which breached its important short term supports and ended below 43500 with a loss of over 500 points.

Nifty Today:

Our markets witnessed profit booking after the uncertainty over the FED decision was over. However, the selling was mainly seen in the banking stocks as the Bank Nifty breached its important support of ’20 DEMA’ for the first time in the recent upmove. This led to unwinding of positions in the banking space and as a result the index corrected sharply on the weekly expiry day. The Nifty index still continued to trade in a rising channel and it ended right around the lower end of the channel which is seen at 18650. A break below this support could lead to a short term correction in the index towards the ’20 DEMA’ support which is around 18530 follwed by swing low support at 18450. On the higher side, 18780-18800 continues to act as the immediate hurdle which needs to be surpassed for an upmove towards new highs. The Bank Nifty index has breached its important 20 DEMA support today which hints at a probable short term corrective phase. In case the index retraces the entire upmove seen in last two and a half months, then the minimum 38.2 percent retracement support will be seen around 43120. Even the midcap index is in overbought zone, but it has not yet given signs of reversal yet. The resistance on the Nifty Midcap 100 index according to retracements is seen in the range of 35200-35300.

                                                               Profit booking in banking stocks drags market lower  

In the near term, we could see some sector rotation while some consolidation or profit booking may be seen in many stocks. Hence, traders are advised to trade with a stock specific approach and keep a buy on dip approach rather than chasing stocks at higher levels.

Nifty, Bank Nifty Levels and FINNIFTY Levels:

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