NIFTY WEEKLY OUTLOOK & TRADING TIPS FOR 4 APRIL TO 8 APRIL 2022

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The war between Russia and Ukraine, the movement of crude oil and the RBI monetary policy meetings, as well as the stock results due in April 2022 would be the main factors that will determine the near trend.

WEEKLY RESISTANCE FOR NIFTY: 17737, 17811, 17962

PIVOT POINT: 17586

WEEKLY SUPPORT FOR NIFTY:  17413, 17361, 17288

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 17700, 17750, 17800

PIVOT POINT: 17650

DAILY SUPPORT FOR NIFTY:  17600, 17550, 17500

DAILY CHART FOR NIFTY

FY22's final week of expiry got off to a slow start, taking inspiration from mixed global stock markets. The benchmark index, the Nifty50, tumbled as soon as the market started towards the psychological support of the 17000 level, from where a smart recovery started to pare the initial losses. The index ended the session up 0.40 percent and settled slightly above the 17200 level. A promising start came on Tuesday in our domestic market, which followed the positive global cues, with the benchmark index Nifty50 opening a significant gap to the upside. The market stayed in a narrow range throughout the session, suggesting that the bears are not going to give up anytime soon. The cops also stood their ground and pounced on every small burglary. After the intense tug of war session, the Nifty ended the day in favor of the bulls with consecutive gains of 0.60 percent to settle just above the 17300 level. The market took a breather on a monthly expiry day and ended the last day of the fiscal year on a flat note. Mixed global cues triggered a flat open followed by a range bound move to close. Amidst all industry indices, trading was mixed as healthy buying in FMCG, auto and housing indices helped to inch higher. On the downside, however, profit bookings at pharma, IT and PSU banks limited the upside. Finally, the Nifty closed up 0.2% to close at 17464. Meanwhile, the broader markets outperformed and closed higher in the 0.4-0.7% range. Nifty opened on a positive note on March 31 but failed to continue its winning streak of the last three sessions. Market ended higher on first day of the new financial year & week with Nifty comfortably closing near 17700. At close, the Sensex was up 708 points at 59276, and the Nifty was up 205  points  at 17670. 

NIFTY: A STRONG SUPPORT WILL BE @ 17300; STRONG RESISTANCE LEVEL SEEN @ 17800

We expect FY23 to see continued volatility in equity markets, particularly in the first half of the year with rising global interest rates and high inflation likely to persist. In this scenario, we anticipate a reallocation of funds from long-term debt to equity funds in the second half of the year, which should bode well for equities. Our year-end target for Nifty is 19800. Some sectors where we are positive include metals, hospitals, hospitality, oil refining, capital goods, etc. In terms of levels for the coming week, the credit policy is ahead  Nifty is placed near the crucial 17600 zone and looking at the recent stellar run this week, a breather at current levels should not be ruled out, although support is near the zone from 17500-17300 lies . On the upside, 17800-18000 could be seen as immediate resistance for the index.

TECHNICALLY SPEAKING

The stock market kicked off FY23 on a positive note. It started the year muted and in-line with global markets but strengthen as the day progressed as the broad market picked up and buying increased in sectors like Banks, Power & Realty. Cabinet approval for mega power policy, drop in crude and improvement in global futures ignited the rally. Russia- Ukraine war, movement of crude and RBI monetary policy meetings would be the major factors that will dictate the near trend.The Nifty managed to cross the key barrier of 17600 on a closing basis on April 01. The weekly chart shows that the index had a sustained rise throughout the week & formed a bullish Outside bar on the weekly chart. Also, on the chart the Nifty has formed a bullish outside bar along with an Engulfing bull candle today. Investors cheered the strong GST numbers for March while reports about Russia started pulling out some troops from the Ukraine capital also aided the sentiment. Technically, after a 17400 breakout the Nifty has maintained breakout continuation formation which is broadly positive. In addition, strong bullish candle on weekly charts along with higher bottom formation also support further uptrend from the current levels. However, traders may prefer to take cautious stance near the 17800 resistance level due to the market being in an overbought situation. The current texture is likely to continue unless the index slips below 17400 or 10-day SMA. Above the same, we could see Nifty touching the level of 17,800 and further upside could lift the index up to 17900. On the flip side, 10-day SMA or 17400/17300 would be the sacrosanct level for the positional traders and below the same, the index could slip to 17200-17000 levels. This shows that the bulls are having upper hand. The daily upper Bollinger Band has started expanding on the upside thus creating room for the index in the higher territory. All these observations suggest that the index is set to test the level of 18000 on the upside. On the downside, the near term support zone shifts higher to 17600-17400.