Markets Today: Here's how to trade Nifty50 on December 23; key levels here

It had been a dreadful week for Indian equity markets, as the key indices fell dramatically, erasing the gains of the last four weeks. The benchmark index experienced a significant decline, plummeting approximately 1200 points from the previous week’s closing figure. As a result, it finished the week below 200 SMA, marking a total loss of nearly 5 per cent.

 

The Nifty50 experienced a significant decline, resembling a bottomless pit, as it breached all essential support levels. This downward movement has led the index to approach its most recent swing low, signaling potential volatility in the market. A significant halt has ended the weekly winning streaks, dampening market sentiments ahead of the Christmas and New Year festivities. 

 

 

From a technical standpoint, as Nifty slipped below the pivotal zone of 200 SMA, the next potential support could be seen around the recent swing low around 23200-23100, while a decisive breach is likely to open further downside towards 22800 in the near period. The formation of a strong Bearish candle on the weekly chart certainly showcases a turnaround move, with bounces to be seen as opportunities to exit longs. 

 

As far as resistance is concerned, 23800-24000 is likely to be seen as an intermediate hurdle, followed by 24150-24300, coinciding with the bearish gap and the cluster of EMAs on the daily charts for the upcoming truncated week.

 

The weak global cues initiated the downward move, but the follow-up sell-off showcases the bears’ eagerness to colour the market red ahead of Christmas. The advance declines have strongly turned to favour Bears, and it is advisable to avoid trying to catch the falling knife with anticipation of bottom-fishing. Considering the recent developments, it is advised to approach markets with proper risk management and refrain from taking complacent bets for the time being.

 

(Disclaimer: Osho Krishan is a senior analyst  of technical and derivatives at Angel One Ltd. Views expressed are his own.)