Nifty likely to continue downtrend; hints of rebound if support holds

Based on market closing on 22, November 

The Nifty closed at 23,349.90 on Thursday, November 21, 2024, down 168.60 points (-0.72%). The index opened negatively at 23,488.40, continued its downward trend to an intraday low of 23,263.20 during morning trade, and then moved sideways before closing.

Sector-wise, realty, media, and private banks ended with a positive bias, while PSU banks, metals, media, and FMCG were the biggest losers. Market breadth was weak, with 755 stocks advancing, 1,922 declining, and 102 unchanged. Top gainers included POWERGRID, ULTRACEMCO, HINDALCO, and GRASIM, while major losers were ADANIENT, ADANIPORTS, SBILIFE, and NTPC. 

Technically, momentum indicators reflect a negative trend, with the index trading below its medium- and long-term moving averages. A black candle formed on the daily chart, closing below the previous day’s candle, further signals a continuation of the downtrend.  

The Relative Strength Index (RSI) is at 29.00, placing the index in the oversold zone—a level rarely seen below 30. If RSI stays below this threshold, further bearish movement is likely. However, any rebound above 30 could lead to a pullback rally. The Nifty is in a bearish phase, with the potential for a continued downtrend if it breaks below 23,300. 

The next critical support lies at 23,150, and a breach of this level may open the door to 22,750. Traders should monitor resistance at 23,400 for signs of recovery.  

Intraday trading 

Support - 23,300, 23,200, and 23,100, 

Resistance - 23,400, 23,500, and 23,600.

Positional trading 

Short-term support  - 23,150 and 22,750,

Resistance - 23,800–24,500. 

Bank Nifty technical outlook 

In the previous session, Bank Nifty closed at 50,372.90, down by 253.60 points. Momentum indicators suggest a bearish trend, with the index trading below its short- and medium-term moving averages. A black candle on the daily chart, coupled with a close below the previous day’s level, signals a continuation of the downtrend.

However, the candle's lower shadow indicates buying interest near the support zone. Intraday resistance is at 50,525, while support is at 50,200. A move above 50,525 is needed to signal a positive trend, while a breach of 50,200 could extend the bearish momentum. 

Intaday level

Support - 50,200, 49,900, and 49,600,

Resistance - 50,525, 50,800, and 51,100.

Positional traders 

Short-term support - 49,600–48,300

Resistance - 51,000–52,400. 

Bank Nifty remains under bearish pressure, with key support at 50,200. A drop below this level may push the index toward 49,600 or lower.A breakout above 50,525 could trigger a recovery, but traders should remain cautious as the overall trend favors the bears.