Nifty Outlook Report - 19th April, 2022

Our markets started the week with a gap down post the extended weekend. Post the gap down, the index witnessed selling pressure for most part of the day and it even sneaked below 17100 mark. Nifty recovered marginally from the intraday low towards the end, but it still ended below 17200 with a loss of over 300 points over last close.

Our markets started the week with a gap down post the extended weekend. Post the gap down, the index witnessed selling pressure for most part of the day and it even sneaked below 17100 mark. Nifty recovered marginally from the intraday low towards the end, but it still ended below 17200 with a loss of over 300 points over last close.

We had a long weekend and usually such long holidays lead to either a gap up or gap down opening depending upon global markets and news flows. This time, the markets opened gap down led by the IT heavyweight Infy, which corrected sharply post announcement of its results.

The Nifty breached its important short term support of ’20 DEMA’ with this gap down and hence, the other sectors such as Banking and Financial too witnessed selling pressure. Although Nifty has breached its short term support with a gap today, it doesn’t appear to be a significant trend reversal.

The broader markets still witnessed some buying interest and the momentum readings on the lower time frame chart are approaching the oversold zone which recently were overbought when index surpassed 18000.

The immediate supports are now placed around 17000 followed by 16800-16850. In case the index corrects towards these supports in next 1-2 says without a meaningful pullback, then oversold set ups could then lead to a support base formation in this zone. Hence, trades can look for contra buying opportunities in the mentioned support zone. The immediate resistances will now be seen around 17350 and 17500.

Inspite of correction in the index, buying interest was seen in the broader markets with a thematic approach such as paper, fertilizer, defense sector stocks etc. saw good stock specific momentum. Traders should look for such sectors in momentum and trade in such stocks for better short term returns.

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