Pre- Market Commentary: Nifty: breach below 22,400 will open downside towards recent low of 22,180

Mumbai, 22 October: Index formed a second consecutive sizable bearish candle with a lower high and lower low signaling continuation of the corrective bias as the index closed below the 20 days EMA. Nifty started the session on a strong note and formed an intraday high of 23,120 in the first hour of trade. However, sharp selling pressure at higher levels saw the index gave up its gains and dragged lower by more than 450 points from the day’s high to form an intraday low of 22,650. Pullback in the last hour of trade saw the index closed off the lows around 22,800 levels.

Nifty despite starting on a positive note failed to move above Monday’s high 23,175 and dragged sharply lower signaling continuation of the corrective consolidation in the range of 22,500-23,150. Nifty has support at 22,500-22,400 levels being the 80% retracement of the last two weeks pullback 22180-23,175. A breach below 22,400 will negate the last two weeks pullback and open downside towards recent low of 22,180.

On the higher side key level to watch is Monday’s high of 23,175, only a move above the same will signal pullback towards 23,300 and 23,500 levels in the coming weeks.

BANK NIFTY: has key short-term support at 53,500-54,000

Bank Nifty formed a sizable bearish candle with a lower high and a lower low indicating continuation of the corrective decline for the second session in a row. The index opened on a positive note but failed to move above last session high 55,883 and witnessed sharp selling pressure in the midsession as it dragged more than 1000 points from the day’s high and closed below the 55,000 levels.

Going ahead, a follow through move below last week low 54,700 will open further downside towards 54,000-53,500 levels in the coming sessions. 

Index has key short-term support at 53,500-54,000 being the confluence of the recent low and the key retracement of the previous major up move.

On the higher side only a move above 55,400 will signal pullback towards 56,000 levels in the coming sessions.

Report by: Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)

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