Nifty Outlook Report - 28th April, 2022

The sell-off in the global markets led to a gap down opening in our markets. The Nifty traded with a negative bias and even breached the 17000 mark at one point. However, it recovered some of the losses in last hour and ended above 17000 with a loss of almost a percent.
 

The volatility in the global markets has led to a lot of uncertainty for our markets too. The index has traded with moves on both sides within the broad range of 16800-17400 in last few sessions. In this recent correction, 16800-16900 has been a crucial support range as Nifty has managed to pull back higher twice from that range. Also, this coincides with the ‘200 DEMA’ and the 50% retracement mark.

Share Market Update
 

On the flipside, the index doesn’t seem to be showing enough strength to show a sustained up move as pullbacks are getting sold into. On the short term charts, this recent movement has led to formation of a ‘Triangle’ pattern on the hourly time frame and hence, a breakout from this is required for any directional move. Being the monthly expiry day, it would be interesting to see if this breakout happens in the coming session which could then set the momentum for the coming May series.

For the expiry day, 17000 put option have highest open interest outstanding indicating that option writers are not expecting expiry below this level. If market sustains below this during the day, then there would be tug-of-war which could lead to higher intraday volatility. 

From a short term perspective, the above mentioned ‘Triangle’ gives a range of 16825-17200 and one should look for trading opportunities only post a breakout from this range. A move above 17200 will then lead to a short term pullback towards 17600 whereas a breach below 16825 could lead a sharp sell-off. Hence, until there’s a breakout from the range of 16825-17200, it is advisable to stay light and avoid aggressive positions.