Nifty Report & Outlook for Trading on 5 April

The Indian benchmark indices experienced a volatile trading session on April 4, with the Nifty surpassing the 22,500 mark amidst fluctuations. The Sensex gained 0.47%, closing at 74,227, while the Nifty climbed 0.36%, settling at 22,514. Analysis suggests a potential bearish reversal, indicated by the formation of a hanging man candlestick pattern at all-time high levels. However, a breakout of a rounding bottom pattern with significant volume offers a contrasting perspective. Moving forward, attention should be given to crucial support and resistance levels for strategic trading decisions.

Technical Analysis:

• Nifty:

  • The Nifty encountered selling pressure during the initial trading hours but managed to rebound, closing with gains.
  • Daily chart analysis indicates a potential bearish reversal signaled by a hanging man pattern.
  • Immediate support levels: 22,300 and 22,200.
  • Resistance levels: 22,600 and 22,650.
  • Momentum indicators suggest continued upward movement.
  • Short-term perspective: Minor pullbacks towards support zones offer buying opportunities.

• Bank Nifty:

  • Bank Nifty surged past significant resistance at 48,000, indicating bullish momentum.
  • Immediate support shifted to 47,500, aligned with the highest open interest on the put side.
  • Post RBI policy announcement, sustaining above 48,000 is crucial for further upside towards 49,000/50,000 levels.
  • Momentum indicators on daily and hourly time frames support continuation of the upmove.
  • Short-term perspective: Crucial support zone at 47,700 – 47,500.

Trading Strategy:

• Nifty:

  • Buy: Consider buying on minor pullbacks towards support levels (22,300 – 22,200).
  • Sell: Initiate short positions if Nifty decisively breaks below 22,300, targeting 22,000 – 21,900.
  • Caution: Exercise caution near resistance levels (22,600 – 22,650); monitor price action for potential reversals.

• Bank Nifty:

  • Buy: Look for buying opportunities on pullbacks towards support zone (47,700 – 47,500).
  • Sell: Consider short positions if Bank Nifty breaches key support at 47,500, targeting lower levels.
  • Monitor: Keep a close watch on price action post-RBI policy announcement for sustained momentum above 48,000.

Conclusion: The Nifty and Bank Nifty exhibited volatility but managed to close with gains. While technical indicators hint at potential reversals, bullish momentum persists, especially in Bank Nifty. Traders should tactically navigate the market, considering crucial support and resistance levels, and remain vigilant for any significant developments. A cautious yet opportunistic approach is advisable for trading on April 5.