NIFTY OUTLOOK FOR 22 SEP 2020

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Bulls lost the ground. The Indian stock market witnessed a knee-jerk reaction to reports that some European countries are contemplating to reimpose lockdown measures as the COVID cases see a spike. Market started the 1st day of week positive & suddenly opening become like a dream as nifty corrected more than 250 points to close the day at 11250. Investors turned cautious considering surging COVID-19 cases across the country and the passage of a contentious farm bill by lawmakers in the upper house of parliament yesterday. Weak trading in European equity markets also added to the already negative sentiment on Dalal Street. The Sensex fell as much as 907 points to hit an intraday low of 37938.

The action today’s trade looks like the Nifty is in a transition phase and the technical setup got weaker. Now 11350-11450 looks like a wall of resistance. We have an indication on the chart that the market probably is setting up for breakdown. If the index closed below 11200 levels, then it could see 11100 and then eventually 11000 in coming days. The risk reward to go long is not justified now. Leadership was not going to come to too many sectors. In fact it is the time to be conservative and cautious as there are conditions that the breakdown may be seen in coming sessions. Medium and long term charts also do not indicate that one can be a buyer in the index at these levels. Hence, be careful in Nifty as well as Bank Nifty.

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Resistance: 11350, 11450, 11550

Support: 11200, 11100, 11000