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WEEKLY RESISTANCE FOR NIFTY: 16600, 16800, 17000
PIVOT POINT: 16400
WEEKLY SUPPORT FOR NIFTY: 16200, 16000, 15800
WEEKLY CHART FOR NIFTY
DAILY RESISTANCE FOR NIFTY: 16450, 16550, 16650
PIVOT POINT: 16350
DAILY SUPPORT FOR NIFTY: 16250, 16150, 16050
DAILY CHART FOR NIFTY
Developments around the globe over the weekend were not in favor of the bulls and as a result Monday morning's SGX Nifty indicated a gap-down open of more than 200 points. We started the week almost like that; but fortunately there were no follow-up sales in the first hour. Indeed, Nifty consolidated in a narrow area around 17000 for most of the session and due to some buying momentum towards the end, the Nifty managed to clip much of the losses. Finally, our markets ended the session with a negligible loss above the 17050 level. After a mid-week pause of Tuesday on account of EID, our markets started the Wednesday session on a comfortable note as they followed favorable signals from global bourses. The gains didn't last too long, however, as we saw a gradual correction in the hours that followed. The benchmark Nifty index appeared to have settled a bit around 16900 but a surprise RBI rate hike triggered a massive sell-off in the last hour and a half to break all key levels in a row. The massive sell-off following RBI's surprise rate hike was followed by a decent price gap on the weekly expiration day on Thursday 5 may 2022. This was mainly due to a strong rebound seen in US markets overnight. The Sensex ended flat with a marginal gain of 33 points at 55702, while the Nifty ended the day with a small gain of 5 points at 16,682. Markets continued the corrective trend on Friday, losing nearly a percent and a half. Weak global cues triggered a gap down start followed by a range bound session to the end. The Nifty index ended up down 1.5% to close at 16,411 levels. Among sectors, apart from power, all other indices ended lower, with realty, metal and consumer durables being the top detractors. The broader indices also lost in the 1.5% to 2% range.
NIFTY: A STRONG SUPPORT WILL BE @ 17400; STRONG RESISTANCE LEVEL SEEN @ 17800
Markets will react to the Reliance number in early trade on Monday and then shift to the global indicators. Rising fears of aggressive US Federal Reserve rate hikes have unsettled investors around the world, including India. On the index front, the Nifty has tested the crucial 16400 support zone and signs suggest the prevailing decline will continue with some pause/recovery in between. In the event of a recovery, the 16600-16800 zone would act as a hurdle. Participants should adjust their positions accordingly and use the rebound to create shorts.
TECHNICALLY SPEAKING
Markets moved south from the start of the trading session and selling intensified thereafter as rising crude oil prices fueled renewed fears that inflation would be a major challenge going forward. The RBI's hawkish stance could hurt growth. Technically, the Nifty is consistently trading below the 200-day and 50-day SMA, which is broadly bearish. Additionally, it has formed a long bearish candle on weekly charts, supporting further weakness from current levels. On intraday charts, the index consistently holds a lower top formation that also supports short-term weakness. For traders, 16300-16100 would be the key support level. However, a quick intraday pullback rally is not out of the question if the index manages to trade above 16100. Above that, the pullback rally could continue to 16600-16800. Below 16100 selling pressure is likely to intensify and below that the Nifty could reach 16000-165800 levels.
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