Nifty Outlook Report - 25th April, 2022

Post a long weekend, our markets witnessed a considerable volatility in this week wherein it initially corrected post a gap down opening and almost tested 16800. It recovered from that level during mid-week and surpassed 17400, but it was not over yet as it gave up some of the gains on the last trading session and ended below 17200 with a weekly loss of 1.74 percent.
 

Post the volatility on both sides, Nifty ended the week almost around the same levels where it started this week and has formed a ‘Doji’ candlestick on the weekly charts. This indicates a tug-of-war by both the bulls and the bears and at the end, the trend remains indecisive. The week’s low of 16824 remains an important support as it is formed at the 50% retracement of the previous up move which also coincides with the ‘200 EMA’ on the daily chart.

Share Market Update

A breach below this would lead to correction towards the next retracement support which is placed around 16600. On the flipside, 17400 will be seen as an immediate hurdle which needs to be surpassed for a positive momentum to continue. In options segment, 17400 and 17500 call options have decent open interest outstanding indicating resistance range while 17000 put option has decent open interest which would be seen as immediate support.

The Banking space has relatively underperformed and although this index is trading near its support, there are no signs of reversal. Amongst other sectoral indices, the Metals space has ended below its ’20 DEMA’ support and hence we could see some more retracement in the near term. Sectors such as Oil & Gas, Auto have seen some positive signs and could see some relative outperformance.

Hence, traders need to be selective in stock picking and need to look out for opportunities on both sides of the trade. A directional move in the market could be seen on breach of the high or low of this doji candle and till then, one should continue with a stock specific approach.