Nifty Gap down, should we expect more downside?
Patience is the virtue of successful people, but in trading being patient can put you in risk!
Nifty opened gap down in Friday trading session led by hawkish statement of European central banks and increasing the inflation forecast for 2022 to 6.8% from 5.1% previously forecasted and downgrading the forecast of GDP. In lieu of the hawkish statement almost all the global markets fall.
Now what is left for the market to react on?
The inflation data published by US comes at 8.6% for the month of may which is above estimated level of 8.3% and now inflation at 40 year high level, which indicate more than expected rate hike is on the way.
The data came after market hours of Indian market, so let’s see how market will react on this data when it will open on Monday, well SGX Nifty closed down by 137 points.
Nifty closed at day high of 16492.80 on Thursday and on very next day it opened with big gap down of almost 200 points, So,holding a position overnight between these global uncertainties can be very risky for swing traders.
Now, what next?
Seeing weak global markets, we can expect negative opening in Indian market but in such times you can’t predict what will happen on Monday.
From the current level, key support level to watch on nifty will be 15900-16000. Closing below the support level can led nifty down till 15700-15750. Resistance levels on the upper side are 16225, 16400 and 16500.
The index is trending between the gaps of 15,942-16,211 on the lower end & 16,370-16,510 on the upper end.
The falling channel indicates support at 16,161. Intraday traders should look to buy around the 16,180-16,240 zone.
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