Nifty Tip for Wednesday

Nifty Tip

Nifty Spot View: 27/07/2022

Cmp: 16463.30

Support & Downside Range: 16414—16380—16340--16250

Resistance & Upside Range: 16575—16630--16685

Short Term Trend Reversal Level:--  downside 15800

Trading View: Intraday bias remains weak ahead of FED outcome till we are trading below 16630—16685 spot levels and in such case downside levels are open minimum 16380 and max 16250 spot levels.

The market is yet to climb the Wall of Worry and it is nervously looking at the impending FED meet to know the extent of the possible rate hike. After a nine month long relentless selling, the  market got a breather as stocks moved to an undervalued zone. 

In the last one month, the market has given a smart rally from the low of 15,183 in the Nifty on 17th June '22 to an intermediate high of 16,752 on 22 July '22, which  is a minor resistance area. A bearish candle has been formed in today's chart and I expect the market to correct further to fill up the gap-up area near 16,350 formed on 20th July '22. 

On a further weakness, the market is likely to test the first support level at 16,000 in the Nifty. However, though there can be some volatility in the near term, I do not expect a sharp fall as the sideways correction from 52-week high in the index is still on. In the near term, the market is slowly factoring in the impending rate hike. In the circumstances, I would prefer that the investors show some patience and allow the dark cloud (read, Fed action) to pass over before taking any large commitment. 

On a personal note, I will be a buyer on sharp corrections in select frontline stocks as there is money to be made only in the future for hardcore investors. (Traders can short the market with appropriate stop loss). A "buy on dip" is the best strategy in a corrective market like this which can run for 3-6 months, at the least, as every sharp rise will encounter profit booking from investors who bought stocks at higher prices in the last rally.

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