Wednesday, April 27, 2022

NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 28 APRIL 2022

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The market continued to be gripped by high volatility after a sharp sell-off in global markets led by a heightened energy crisis and weak Chinese economic outlook, underpinned by prospects for US interest rate hikes. Investors are considering the possibility of a global slowdown due to central bank monetary tightening, China lockdown and the Russia-Ukraine war. This has led to an outflow of funds from equity markets to safe havens.  Bears gripped Dalal Street on Wednesday forcing benchmark domestic equity market indices lower. BSE Sensex lost 537 points to trade at 56819 while NSE Nifty 50 lost 162 points or 0.94% to end trading at 17038. India VIX the volatility index rose 7.4% to settle at 20 level. Bank Nifty lost 1.03%. As in recent months, the outlook for FY23 earnings has continued to deteriorate. Increasing news of restrictions on Indonesian palm oil exports would pose input cost challenges for all FMCG companies. This sector faces the highest risk of earnings downgrades this quarter. Similarly, the pressure on fuel and raw material costs would also affect the earnings of cement and durable goods companies. So far, the trend of the fourth-quarter earnings season has pointed to disappointments and violent stock reactions to earnings shortfalls. Banks and resource companies are relatively sheltered from disappointment but are also consensus overweight positions for market participants. In the short term, Nifty remains in a corrective phase with resistance at 17315. For the medium term, we remain broadly positive and recommend dips. We see value in select financials and energy stocks, while IT stocks are expected to trade on a negative bias. Benchmark index Nifty closed another trading day with range. The index remained below 200DMA throughout the trading session. The daily RSI is in a bearish crossover and falling. Going forward, range bound trades could continue in the short term. Support is seen at 16950/16850 while resistance is seen at 17300 on the upper end.  The Bank Nifty index remained under selling pressure after a gap-down open. The index on the daily chart has formed a doji candlestick, indicating indecisiveness in the market. Index downside support stands at 35500 and a break below will trigger further downside. The upside resistance stands at 37200 and just above that the upward movement just resumes.

Resistance: 17100 17200 17300

Support: 16900 16800 16700

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