Nifty Trade Setup for October 23: Nifty Falls 0.54%, Will 22,500 Support Hold?

The Nifty 50 extended its decline on Thursday, October 22, falling 123.70 points, or 0.54%, to close at 22,687.65. The index opened at 22,887.75 and touched an intraday low of 22,534.85 before recovering partially. The close below 22,800 reflects continued selling pressure, with the index remaining below several key moving averages. Traders will now watch whether the index can stabilise near the recent lows or move towards the major support at 22,221.85.

Market Breadth: Selling Pressure Remains Broad-Based

Market breadth remained negative, with 14 stocks advancing and 36 declining in the Nifty 50 index. Nifty Defence, Nifty FMCG and Nifty Media were among the weaker sectors, adding to the pressure on the broader index. The predominance of declining stocks indicates that buying interest remains limited despite intermittent rebounds. A sustained recovery will require broader participation from index constituents alongside a move above immediate resistance levels.

Nifty Technical Setup: Index Remains Below Key Moving Averages

The Nifty 50 closed below its daily EMAs near 22,780.60 and 22,865.42, keeping the short-term trend under pressure. The intraday low of 22,534.85 is the immediate support to monitor, while 22,221.85 remains the major horizontal support. On the upside, the 22,780–22,865 zone is the first hurdle, followed by resistance at 23,076.90. A sustained move above 23,076.90 would improve the recovery outlook, while a break below 22,534.85 could extend the decline.

RSI and Momentum Indicators: Momentum Remains Weak

The daily RSI stands at 43.98, while the hourly RSI is at 44.11, with both readings below the neutral 50 mark. This indicates that bearish momentum continues to dominate the broader short-term trend. The 15-minute RSI has recovered to 50.40, suggesting some stabilisation on the shorter timeframe. However, this improvement needs confirmation through stronger price action and a sustained move above nearby resistance before the index can establish a meaningful recovery.

Key Levels to Track for Nifty on October 23

The Nifty 50 remains under pressure, with negative market breadth and daily and hourly RSI readings below 50. Holding above 22,534.85 could encourage a short-term rebound towards 22,780–22,865. However, a decisive move above 23,076.90 is needed to strengthen the recovery. If the index breaks below 22,534.85, selling pressure could intensify towards the major support at 22,221.85. Until the index reclaims key resistance levels, the near-term outlook remains cautious.