Chartists Scan Nifty Next Lower Levels Amid Stock Market Routs

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Nifty Can Fall to 22910 if 23250 200 DMA Fails to Hold

By S Jha

New Delhi, October 27: In one month, Nifty has corrected by 7.63 per cent. In absolute term, Nifty lost almost 2000 points in just one month. Chartists are taking hard looks at technical patterns to predict the bottom of the 50-share index.

Nifty on Friday hit the bottom of 24084. In the last 45-minute of the trade, the 50-share index made a minor recovery. Nifty on Friday eventually closed with loss of 218 points.

The foreign institutional investors (FIIs) have been on selling spree in the stock market. The FIIs have sold a net of over ₹1 lakh crore in the month of October. Such heavy selling by the FIIs is taking a tall on the bourses per market participants.

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Technical analysts are taking grim views of Nifty. The 50-share index couldn’t take support at 100 DMA of 24550. DMA stands for daily moving averages in technical term.

The chartists are alarmed with the prospects that the next level for Nifty could be 200 DMA of around 23350. That is still far away from the current level of 24180.

As per Fibonacci retracement, per market participants, Nifty may hit further lower. The 38.2 per cent Fibonacci retracement of the bull-run from April 2023 to the highest level comes to 22910. Nifty was at 17,500 in September 2023. The Nifty peak is 26277, seen recently.

The 38.2 per cent Fibonacci retracement for Nifty at 22910 is also about 400 points below 200 DMA. The chartists are wary that Nifty may drop down to 22910 level unless there is a reversal of the falling trends.

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The chartists are also concerned at the advance-decline (AD) ratio hitting 0.15 per cent. This is lowest since the Lok Sabha results were announced. The chartists are also looking at signs of the market bottoming out.

The FIIs selling in October is giving pace to the slump in the bourses. In the last four trading sessions of this week, the FIIs recorded selling shares worth over ₹19,000 crores. The FIIs had sold over a net of ₹3037 crores on Friday.

Israel had launched airstrikes against Iran on Saturday. Iran’s supreme leader Ayatollah Ali Khamenei in a terse message on X stated that the Israel’s attacks were “miscalculations”.

Disclaimer: This article makes no recommendation for any trade in the stock market.

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