Nifty Today Outlook Report - 02nd May, 2022

Nifty Today for 02 May, 2022
Nifty Today Outlook Report as on 02 May 2022

by Ruchit Jain Last Updated: 2022-05-02T13:09:53+05:30

Nifty started this week with a gap down opening and then recovered from the lows of 16900 mark. Although the index traded within a range of 500 points throughout the week, the volatility within the range was one the most difficult to trade. Ultimately, the index ended the week around 17400 with a loss of about half-a-percent over last week’s close.

nifty

 

Our markets had a bumpy ride within a 500 point range throughout the week. The volatility in international markets led to moves on both sides in our market too. On Friday, our markets had a steady start for the May series, but we saw a sharp sell-off in last hour of the trade. Now, if we look at the technical structure, recently the index has corrected from 18115 to 16825 and has then consolidated within a range. This has led to formation of a ‘Bearish Flag’ pattern on the daily chart.

Nifty Today:


As of now, the prices are trading within the flag pattern but it would be crucial to see how the index moves in the coming week. In case the Nifty breaches the support end of 16825, then that would led to a sharp correction in the short term which is usually the impact of the above mentioned pattern. On the flipside, 17380-17420 has now become a strong hurdle which needs to be surpassed for any positivity.

Till the index is trading below this resistance end, we advice traders to stay cautious and avoid aggressive positions. If we combine the technical structure with the derivatives data, then the derivatives data too does not hint at any optimistic picture as the rollovers in both Nifty and Bank Nifty were lower than their averages and FII’s too have rolled over their short positions in the index futures segment. Hence, one needs to be cautious until the data and the trend changes.

Amongst sectoral indices, none of the index is showing significant strength to drive the markets higher in the short term. The Bank Nifty index is consolidating in a triangle with important boundaries placed at 37000-35500. A breakout from either side would then lead to directional move in direction of the breakout and hence could be the leading sector to drive the benchmark in that direction.

 

Nifty Levels

Bank Nifty Levels

Support 1

16950

35750

Support 2

16825

36720

Resistance 1

17300

36510

Resistance 2

17415

35500

 

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About the Author

Ruchit Jain is Lead Research Analyst at 5paisa. He has a vast experience of 14 years in this field and is proficient in Technical and Derivatives Research. He has completed his CMT (U.S.A.) and has done Masters in the field of Finance at Mumbai University.

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