Nifty Prediction Today – May 22, 2025: Downside Risks Persist, Go Short Below Key Support

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Nifty Prediction Today – May 22, 2025: Downside Risks Persist, Go Short Below Key Support

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Nifty forecast for May 22, 2025, indicates a possible downside continuation. Immediate support levels are in focus. Traders should consider short positions if the index breaks below 22,250.

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Nifty Prediction Today – May 22, 2025: Further Fall Possible. Go Short on a Break Below Immediate Support

Introduction: Bears Back in Control as Sentiment Turns Cautious

Indian benchmark index Nifty 50 ended on a weak note in yesterday’s session, reflecting growing caution across global and domestic investors. As we step into May 22, 2025, market signals continue to point towards a potential continuation of the downside. The index has now approached a critical support zone, and a breach below this level could trigger aggressive selling pressure. For traders and market participants, the message is clear: stay alert, and be ready to go short if support fails to hold.

Previous Session Recap: Nervousness Ahead of Key Events

On May 21, 2025, the Nifty 50 closed at 22,297.55, down 137.65 points or 0.61%, slipping below the psychologically important 22,400 level. The fall was broad-based, with weakness seen in IT, banking, and auto stocks. Market breadth favored the bears, and FIIs (Foreign Institutional Investors) were net sellers once again, reflecting a shift in global risk appetite due to rising bond yields and political uncertainties ahead of state elections.

The broader NSE indices also echoed the cautious tone. Midcap and small-cap indices underperformed, registering deeper cuts of over 1%. Volatility, measured by India VIX, surged above the 15 mark, indicating increased nervousness among traders.

Key Technical Levels to Watch for May 22, 2025

• Immediate Resistance: 22,450

• Key Resistance Zone: 22,550–22,600

• Immediate Support: 22,250

• Major Support Zone: 22,100–22,050

The index has been making lower highs and lower lows since peaking at 22,980 earlier this month. The current market structure suggests a bearish bias, with momentum indicators such as RSI (Relative Strength Index) hovering around the 40–45 zone, pointing towards weakening strength. If Nifty breaks below the 22,250 mark, a swift decline towards 22,100 or even 21,950 is likely.

Chart View: Bearish Flag Breakdown in Play

From a technical standpoint, the Nifty has been forming a bearish flag pattern on the hourly charts. The breakdown from this pattern, confirmed with a close below 22,300, signals continuation of the downtrend. Volume analysis also supports the bearish case, with rising volumes on down days and tepid participation on rebounds.

The 50-day moving average (DMA), now at 22,420, is acting as stiff resistance, while the 100-DMA near 22,150 remains the next target for bears.

Why Further Fall Is Likely: 5 Key Reasons

1. Weak Global Cues

Wall Street closed in the red yesterday, led by tech stock losses. Asian markets are mixed-to-negative this morning, and the SGX Nifty is pointing to a weak start. Global investors are also wary of central bank commentary and geopolitical developments.

2. FIIs Turning Cautious

Foreign Institutional Investors have turned net sellers in Indian equities for five consecutive sessions, booking profits amidst global uncertainty. The strength in the US dollar index (DXY) and rising US yields are leading FIIs to reduce exposure to emerging markets.

3. Rising Volatility

India VIX rising above 15 after weeks of sub-13 levels is a red flag. It indicates that market participants expect larger intraday swings and are willing to pay a premium for protection via options.

4. Election Jitters

With key state elections looming and speculation about early policy announcements, traders are staying on the sidelines. Uncertainty around the political landscape could weigh on sentiments in the short term.

5. Technical Breakdown

The failure to hold 22,400 convincingly and repeated rejections near 22,600 confirms distribution at higher levels. If the 22,250 zone breaks, technical analysts expect the selling to intensify.

What Traders Should Do Today

For Intraday Traders:

• Go Short if Nifty breaks and sustains below 22,250.

• Targets: 22,100 / 21,950

• Stop-loss: 22,370 (above previous intraday high)

For Swing Traders:

• Maintain a bearish stance until the index closes above 22,600.

• Consider shorting rallies with a stop loss near the 50-DMA.

• Focus on bearish options strategies like Bear Put Spread or Short Straddle for volatility play.

For Positional Investors:

• Avoid fresh long positions until clarity emerges.

• Use corrections to accumulate quality stocks in auto, FMCG, and capital goods sectors.

• Monitor Q4 earnings, especially from banking and realty sectors.

Sector Watch: Who’s Leading the Decline?

• IT Stocks: Tech majors remain under pressure as global tech outlook dims. Infosys, TCS, and HCL Tech are down 2–3% this week.

• Banking & Financials: Heavyweights like HDFC Bank and Kotak Bank are slipping on concerns over margin pressure and regulatory scrutiny.

• Auto Stocks: Post-Q4 profit bookings are hitting Tata Motors and Bajaj Auto.

• Pharma & FMCG: Defensive buying has kept stocks like Cipla, Sun Pharma, and ITC relatively resilient.

Global Market Snapshot

• Dow Jones: -0.48%

• Nasdaq: -0.62%

• Nikkei 225: -0.35%

• Hang Seng: +0.12%

• SGX Nifty: -0.26% (22,240)

Economic Calendar to Watch

• India’s Weekly Forex Reserves Data

• US Weekly Jobless Claims

• Fed Officials’ Speeches

• Crude Oil Inventories

• Earnings: HDFC Life, Bajaj Finserv, Tata Power

Expert Opinion

“Technically, Nifty is on thin ice. If the 22,250 level gives way, traders should brace for a deeper correction towards 22,000. We advise short-term traders to stay light and nimble,” said Anand Mehta, Head of Technical Research at Mumbai-based brokerage firm SK Securities.

“A phase of consolidation or time-wise correction is healthy for the market. We are advising clients to accumulate on dips, but only in staggered quantities,” added Priya Arora, Portfolio Manager at Quantum Invest.

Trend Is Down Until Proven Otherwise

May 22, 2025, presents a critical juncture for the Nifty. A break below 22,250 could confirm that the bears are firmly in the driver’s seat, opening up room for further downside. Traders are advised to monitor price action closely around support zones and follow disciplined risk management. For investors, this phase could offer opportunities to cherry-pick quality stocks for the long term, but patience is key.

As always, trade what you see—not what you think.

FAQs on Nifty Outlook – May 22, 2025

Q1: Should I buy Nifty today?
A1: Not until the index reclaims 22,600 with conviction. Wait and watch is advisable.

Q2: What is the immediate support level for Nifty?
A2: Immediate support lies at 22,250. A break below could trigger a sharper fall.

Q3: Is this a good time to short the market?
A3: Yes, intraday shorting below 22,250 can be considered with proper stop-loss.

Q4: Which sectors are relatively safer now?
A4: FMCG and pharma stocks are showing relative strength due to defensive demand.

Q5: Will elections impact the market?
A5: Yes, political uncertainty often leads to volatility. Watch for poll outcome trends.