StockEdge's Morning Market Update - 18th Nov
The Nifty 50 lost 616 points over the week, closing at 23,532. The market consistently made lower lows throughout the week, with no support levels holding. Bears dominated at higher levels, and the entire market participated in the fall. The Metal Index and PSU Banks were the biggest losers, down 8.6% and 7%, respectively. However, the IT Index displayed strong relative strength. The fall was accompanied by a surge in the Dollar Index, which touched 107 levels, approaching a strong resistance zone of 107–108. U.S. indices also corrected 2.5%–3%, cooling off from the "Trump Rally."
Technically, after a nearly 10% corrective move, the Nifty closed at its critical 200 EMA, forming a small Doji pattern on Friday. The 23,300–23,500 zone is a crucial support area. Market breadth and technical indicators are deeply oversold. If bulls are to hold this zone, a rebound could be expected this week, given the Dollar Index's resistance and other technical setups. However, 23,850 now acts as immediate resistance and is likely to face selling pressure.
The Bank Nifty broke its lower range last week and is sitting at its 200 EMA support. A rebound in the Bank Nifty could significantly support the Nifty's recovery.
Conclusion: The setup remains oversold, with major indices near key support levels and the Dollar Index at strong resistance. While the conditions are ripe for a pullback, confirmation from price action is awaited.
Nifty Support: 23,500, 23,300 Resistance: 23,675, 23,850
Bank Nifty Support: 50,000, 49,900 Resistance: 50,400, 50,800