Nifty Outlook-5-Jan-2023

Nifty started the session on a flat note but it was unable to surpass its hurdle of 18250-18265. The index then witnessed selling pressure and it corrected gradually throughout the day to end below 18050 with a loss of over a percent.

Nifty Today:

Post the pullback move towards the end of December, Nifty was hovering around its crucial ’20 DEMA’ hurdle since last three trading sessions. This resistance at 18250-18265 was an important one but since the data was not optimistic, our markets witnessed selling pressure ahead of the weekly expiry day. FII’s started the January series with rollover of some bullish positions but in last few sessions they have formed fresh short positions and their ‘Long Short Ratio’ has declined to below 50 percent. This indicates that they have more short positions in the index futures segment which is not a good sign. Now technically, a rising trendline support for Nifty is in the range of 17900-17950 which is an important support now while 18250 will be seen as the immediate hurdle. The index needs a breakout on either side for a directional move and until the breakout happens, the consolidation could continue. Traders are advised to look to trade within the range and if breakout happens on either side, then one can expect a short term directional move.  

Nifty witnessed selling pressure as FII’s form short positions

The U.S. markets too are trading around important levels as Dow Jones is hovering around its 89 EMA support while the Nasdaq Index is trading close to the October lows. Thus, the global cues could determine the near term moves for our markets too and hence, traders should stay cautious and look for breakout from the range for directional bets.
 

Nifty & Bank Nifty Levels: