As April expiry comes to an end, what lies ahead for Nifty?

In the past five days, Nifty traded with huge volatility and lost about 147 points or 0.84%.

It was an action-packed week in the Indian market due to the corporate results, as most of the key companies declared results in this period. ICICI Bank, Bajaj Auto, Bajaj Finance, HUL, SBI Life Insurance, and HDFC Life Insurance are some of the companies that declared results during the week. Along with the corporate results, global cues weighed on Nifty. Weakness in the American markets, followed by a lockdown in China were responsible for the bad sentiment in the market.

Despite such a scenario, the benchmark index traded in a range with a slight negative bias. The index was primarily subjected to huge gap-ups and gap-downs due to the global cues. On the day of the monthly expiry, the index rose about 1.21% to close at 17245.05. During this April expiry, Nifty swung on both sides but on a close-to-close basis, ended lower by 299 points since March expiry. India VIX, however, traded below the 20-mark for most of the time and closed about 5.73% lower in April expiry.

Interestingly, the index formed a bullish pinbar candle on the day of expiry. It closed above its 50-DMA, 100-DMA and 200-DMA, but is still below the 20-DMA. The 14-period daily RSI has crossed above its prior swing high and is bullish. In the past nine trading sessions, Nifty traded in a range-bound manner and pivoted around the 17000-level. The moving averages are seen to be squeezing. For any strong trend, Nifty needs to break the trading range of 16824-17414.

Heading onto the next week, the 50-DMA level of 17,100 will act as the first support, followed by the 17,000-psychological level. The low level of the trading range, i.e, 16,824 shall act as the ultimate support, below which the index can witness a severe downfall and a downtrend will be confirmed. However, on the upside, the level of 17414, which is the upper limit of the trading range, shall act as the crucial resistance to break.

If the index gives a breakout above this level, it is likely to test the level of 17500, followed by 17663 in near future. The key event ahead is the US Fed meeting scheduled on May 4. Till then, volatility is expected, and any negative news flow can trigger the market severely. Meanwhile, the stock-specific action will continue ahead of the results.

Also read: F&O CuesKey support & resistance levels for Nifty 50