NIFTY OUTLOOK & TRADING FOR 15 FEB 2022

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On 14 February 2022 we witnessed bloodbath in the Indian markets with the broader index falling more than 3%. The sell-off was mainly due to tensions between Russia and Ukraine. Almost all major indices around the world were red. Panic selling in global markets took its toll on domestic benchmark indices as investors worried about geopolitical tensions and rising crude oil prices. With growing concern over the prospect of a likely US interest rate hike, overseas funds exited Indian equities at a rapid pace, which also caused Nifty to slip below the psychological 17k mark. The Indian market fell sharply amid geopolitical tensions. These geopolitical tensions are causing crude oil prices and the dollar index to rise sharply, which is another negative trigger for emerging markets like India. We are seeing continued selling of FIIs while DIIs flows could also drop ahead of the big LIC IPO. Inflation and the environment of rising interest rates in the US continue to worry the market and these geopolitical tensions are creating a double whammy for global markets. At close, the Sensex was down 1747 points at 56405, and the Nifty was down 532 points at 16842.

Technically, the Nifty has created a bearish gap down into the candlestick formation, suggesting further weakness from current levels. The Nifty is now trading near the 200-day SMA level and as long as the index trades below 17000 there are chances of it reaching the 16800 and 16600 levels. Investors are advised to maintain a strict stop loss given the volatility in the markets. Buying on dips is also recommended, but investors should plan their position to maintain adequate liquidity. For Nifty, 16700 will act as a very strong support. If this level breaks we may see levels of 16600 after which 16500 will be the next strong support zone. On the upside 16950 will act as a very strong resistance, if this level is broken we could see 17050 level, after that 17150 will be the next strong resistance level. For Bank Nifty, 36500 will act as a very strong support level. Once this level is broken the next strong support is around 36500 levels after which 32650 will act as the next strong support. On the upside, 37100 will be a strong resistance level, after that the next strong resistance will be at the 37200 to 37500 levels. Tomorrow's key outcome is CRISIL and the sectors to focus on tomorrow are Banking, Consumer Discretionary, IT and Real Estate. Technically, Nifty is trading near its 200-DMA of 16800 which is a critical support level and if Nifty manages to hold this level we can expect a rally otherwise further weakness towards the 16400/16000 levels expected in the coming trading session. On the upside, 17000 will act as an immediate hurdle while 17200-17300 is a critical resistance zone. Short-term traders are advised to keep an eye on the 16800 level, while long-term investors should use the current decline as a buying opportunity as anecdotally any panic over geopolitical tensions creates good buying opportunities. BankNifty is also trading near its 200-DMA from 36500; below that, the weakness can be extended, otherwise a recovery towards 37500/38000 is expected. The put-call ratio has fallen again to 0.78, which means it is in oversold territory.

Resistance: 17000, 17200, 17500

Support: 16800, 16650, 16400