NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR WEDNESDAY 6 APRIL 2023

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Domestic indices traded in positive territory throughout the day despite mixed global signals on healthy macro data. The manufacturing PMI hit a 3-month high of 56.4 in March, suggesting strong demand. In addition, net direct tax revenues have exceeded EU budget estimates by 17%, confirming continued robust economic growth. The domestic market is showing resilience, unaffected by weaker global peers, thanks to strong quarterly results from banks and NBFCs and the unexpected tax cut. In addition, the latest US data showed a softening job market and falling factory orders, raising the likelihood of a pause in Federal Reserve rate hikes. The RBI is expected to announce a 25 basis point rate hike in its monetary policy announcement Thursday ahead of a pause, positive for the market. We have seen a short covering move and there is still room for more short covering, but the market needs new longs supported by institutional investors. In the near term, key events such as RBI policy, macroeconomic data and Q4 results will set the market direction from here. For the first time in 2023, the market has won four consecutive sessions. Sensex and Nifty end the day on their highs, led by financial heavyweights and ITC. Nifty opened higher and continued to strengthen throughout the session to finally close near day’s high with gains of 159 points (+0.9%) at 17,557 levels. Nifty is showing bullish momentum and closed above 17550 and above that we can expect a short covering move towards 17650. On the downside, 17450 and 17400 are key support levels. Banknifty is showing relative strength with 41300 an immediate target. Above 41300  we can expect a rally towards 41500 while on the downside 40500 and 40300 are important to support the levels.

Resistance: 17400, 17500, 17600   

Support: 17300, 17200, 17100