Market Outlook for 22 April 2024

Our markets corrected sharply in the week gone by mainly due to uncertainty over global geopolitical tensions and selling by the FIIs which resulted in the index breaking the 22000 mark. However, we witnessed recovery from the low of 21780 in the last trading session and Nifty ended around 22150 with a weekly loss of over one and a half percent.

Nifty Today:

Our markets corrected sharply in the week gone by mainly due to uncertainty over global geopolitical tensions and selling by the FIIs which resulted in the index breaking the 22000 mark. However, we witnessed recovery from the low of 21780 in the last trading session and Nifty ended around 22150 with a weekly loss of over one and a half percent.
 
Markets have gone through a sharp correction in last few days where the index corrected by about 1000 points from the high of 22775 to 21777 in a span of just six trading sessions. This led to oversold momentum setups on the lower time frame charts and hence, we witnessed some recovery post the gap down opening on Friday from the 89 DEMA support. However, the data indicates aggressive short formations by FIIs in the index futures segment and the technical RSI readings on the daily as well as the weekly charts have turned negative. Now because the index corrected by 1000 points without any meaningful pullback, the hourly readings were oversold and hence, this upmove of Friday seems to be a pullback move only. The 89 DEMA around 21750 is a crucial support for the coming week, while the retracement levels of this correction at 22277 and 22395 will be seen as resistances. Considering the higher time frame chart set up, we advise traders to look to lighten up long positions on pullback move towards the above mentioned resistances. On the lower side, if the index breaks 21750, then we could see a downmove towards 21530 and 21270 in the short term. A positive crossover in the readings on the daily chart is now required to consider the upmove as a resumption of the uptrend.
 
An interesting outperformance has been noted in the Nifty Nifty SmallCap250 index as it has relatively outperformed the benchmark in this corrective phase. This indicates more selling pressure in the large cap names rather than the broader market. However, 14800 is the crucial support for the index (CMP is 15160) which is the 40 DEMA. If this support is broken, then one should turn cautious and lighten up longs from the small cap names.

                                            Nifty turns lower ahead of weak global cues

Nifty, Bank Nifty Levels and  FINNIFTY Levels: