Weekly Market Outlook for 24 Apr to 28 Apr

The week gone by was a time of consolidation for the indices as the benchmark traded within a narrow range, and ended tad above 17600 with a weekly loss of over a percent. The broader markets (midcaps and smallcaps) rallied higher for most of the week, but gave up some of the gains in Friday’s session.

Nifty Today:

The April month started on a robust note as the index had given a breakout from its consolidation phase above 17200. The index rallied sharply upto 17850 which led to overbought momentum set ups. Some corrective phase was needed post this and thus the correction of last 4-5 days was much on expected lines. So far, this has turned out to be a time-wise correction as the index has traded in a narrow range and has so far managed to trade above its important ’20 DEMA’ support which is now around 17520. Hence, this would be seen as important support for the short term. A breakdown below this can then lead to some price-wise correction but till this is intact, the bias remains sideways to positive. In derivatives segment, FII’s have covered their short positions in the April series and their ‘Long Short Ratio’ has improved from 10 percent at the start of this month to 38 percent. 

Nifty witnesses time-wise corrective phase, 17500 important support

While we are approaching the monthly expiry, it will be crucial to see if the index manages to hold above 17500 support and if it breaks 17700 on the upside, then it could lead to a resumption of the short term uptrend. Thus, traders should trade with a stock specific approach for now, with a watch on the range of 17500-17700 on Nifty. It is advisable to trade in the direction of the breakout once we get a move beyond these levels. Amongst sectoral indices, the FMCG basket is witnessing a good buying interest and the Nifty FMCG index too have positive setups. Traders can look for stock specific opportunities from this sector from a trading perspective.

Nifty & Bank Nifty Levels: