Trade Setup For Oct. 23: Nifty 50 Support At 24,200 Amid Increasing Bearish Sentiment
Analysts warn that the Nifty 50 index has confirmed a bearish trend, with a significant support level identified at 24,200, where a bullish gap was previously established in August.
The Nifty 50 index saw a flat start on Tuesday, but the selling pressure dragged the Nifty index to close below the 24,500 mark. Analysts expect pressure to continue with the charts indicating further downside.
After trading within a range for the past couple of weeks, prices have broken out to the downside, confirming a lower top-lower-bottom structure on the daily chart.
This also broke the critical neckline of the head and shoulder pattern which indicate a reversal from the bullish momentum. This comes as the October sell-off is mirroring the rise seen in September, according to Rajesh Bhosale, Equity Technical Analyst, Angel One.
He also added that prices have slipped below the 89 DEMA for the first time since June.
The key support for Nifty 50 will be at 24,200, where a bullish gap was left in August, with immediate support at 24,300, said Bhosale. While resistance would be at 24,650-24700.
Shrikant Chouhan, Head Equity Research, Kotak Securities, indicated that if the market is trading below the support levels, the index could fall to 24,250 levels, while on the upside it could touch 24,700 levels.
Bank Nifty that was holding on till yesterday also saw a breakdown amid selling pressure. The support for Bank Nifty is placed at 51,000 below which the index could fall to 50,200 levels, said Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas. He also added that on the upside, 51,800-51,900 could act as an immediate hurdle for Bank Nifty.
"A sustained break below 51,000 could trigger further downside momentum, potentially leading to a more pronounced decline in Bank Nifty,” added Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment.
Market Recap
The NSE Nifty 50 and the BSE Sensex closed at the lowest level in over two months on Tuesday as the share price of heavyweights Reliance Industries Ltd. and HDFC Bank Ltd. dragged. Broad–based weakness in US stocks, Asian and European shares due to concern about the pace of unwinding of monetary conditions in the US also seeped into the Indian markets.
The Nifty 50 ended 309 points or 1.25% down at 24,472.10, and the Sensex closed 930.55 or 1.15% down at 80,220.72, the lowest level since Aug 14.
Money Market
The Indian rupee hit a fresh closing record as it closed little changed against the US dollar on Tuesday on likely dollar selling by the Reserve Bank of India amid the continuous selling of domestic stocks by global funds.
The rupee closed flat at Rs 84.076 against the dollar, according to Bloomberg data. The domestic currency had closed at Rs 84.066 against the greenback on Monday.
