Friday, September 22, 2023

NIFTY WEEKLY OUTLOOK & TRADING TIPS FOR 25 SEP TO 29 SEP 2023

WEEKLY RESISTANCE FOR NIFTY: 19800, 20000, 20200

PIVOT POINT: 19600

WEEKLY SUPPORT FOR NIFTY:  19400, 19200, 19000

WEEKLY CHART FOR NIFTY

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Nifty closed lower on September 18 in a volatile session. At the close, Nifty fell 0.35% or 69 points to 20122. Volumes on the NSE continued to decline. The smallcap index fell more than the Nifty even as the advance drop ratio fell sharply to 0.65:1. Global stocks mostly fell on Monday as growth concerns tested investors' nerves ahead of a week of central bank meetings in five of the 10 most widely traded currencies. Ahead of these policy decisions, which will show how major central banks see progress in the fight against inflation, traders have taken risk off the table. 19 sep 2023 market was closed on occasion of Ganesh chaturthi. Indian stock indices closed lower for the second consecutive day on September 20, with Nifty falling below 19900 as heavyweights and all sectors sold off, except energy stocks. At the close, the Sensex was down 796 points at 66800 and the Nifty fell 231 points to 19901. After a gap down start, the market remained under selling pressure and extended losses throughout the day to end near the day's low. The Sensex and Nifty indices touched the day's low of 66728 and 19878. Domestic benchmark indices closed with losses for the third straight day on September 21 after the US Federal Reserve maintained status quo at its policy meeting but suggested interest rates would remain higher for longer. Sensex fell 570 points to 66230, while the broader Nifty fell 159 points to 19742. The biggest detractors for the indices were stocks from the banking, automotive and financial services sectors. Bearish sentiment in global stock markets led to selling in the domestic market for the third consecutive day as investors worried about the US Federal Reserve's statement announcing another interest rate hike later this year. Markets extended decline and lost nearly half a percent on 22 September 2023, in continuation to the prevailing corrective phase. After the initial uptick, Nifty oscillated sharply in a range and finally settled around the day’s low at 19674 levels.

NIFTY: STRONG SUPPORT& STRONG RESISTANCE LEVEL

Nifty faced sustained selling pressure throughout the week, resulting in a decline of 2.80% from its all-time high. This latest correction has caused it to fall below the critical 21-day Exponential Moving Average (21EMA). Sentiment appears to be bearish at this point, with a key support level identified at 19,600. A break below 19,600 could potentially trigger a stronger market correction. On the upside, 19,800 is likely to serve as a resistance level.

 TECHNICALLY SPEAKING

The downward spiral in markets continued despite the recovery in other Asian markets, as investors booked profits for the fourth consecutive session following the recent rally. While Indian market valuations have turned expensive, other major concerns such as rising crude oil prices, a stable US dollar index and government bond yields coupled with continued FII selling have dampened sentiment. Technically, the Nifty has formed a long bearish candle on the weekly charts, indicating weak sentiment in the near future. However, due to temporary oversold conditions, we could expect a one-off recovery rally in the near term. For short-term traders, the 50-day SMA (Simple Moving Average) 19600 and 19500 would now be key support areas, while 19800 and 19900 could be key resistance areas. For Bank Nifty, the 50-day SMA or 45,000 would be the untouchable support level. As long as the price is below this value, the weak mood is likely to continue. Below this the index can slip to 44300-44000. On the other hand, a new uptrend is only possible once a 50-day SMA or 45,000 is cleared, above which it could rise to 45,400-45,500.

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