Nifty Call: Positional traders may be lower now
The Sensex and Nifty 50 have pulled back from their intraday highs, returned all gains and are now trading flat. The Sensex is at 17,556 (0.15 per cent gain) and the Nifty is at 58,630 (0.3 per cent). The overall picture is weak. The Sensex has resistance in the region of 59,000-59,500. The Nifty has resistance at 17,800. The Nifty has support at 17,400 and the Sensex at 58,000. The two indices are likely to break these supports and fall to 17,000 and 57,000 respectively. Please note that Indian markets will be closed for the rest of the week from Thursday due to public holidays. So the chances of a wide gap opening on Monday are high.
In Asia, with the exception of the Shanghai Composite (3,199, down 0.44 per cent), other major indices are trading in the green. The Nikkei 225 (26,722), Hang Seng (21,343) and Kospi (2,704) are in the 0.1-1.5 percent range. In the US, the Dow Jones Industrial Average (34,220.36, down 0.26 percent) fell sharply to a day high of 34,669.97. The price action on the chart indicates that it is likely to break 34,000 in the coming days and fall to 33,500-33,000.
Futures: The Nifty 50 declined sharply after hitting an April 17 (17,596) high of 17,704. The look is bearish. The deal could fall to 17,450-17,400. Looking at the bigger picture, the bias is negative for a break of less than 17,400 and drops to 17,000 over the next few weeks. Resistances were at 17,630 and 17,730
Since today is the last trading day of the week, we suggest that traders stay away from intraday trades. However, positional trades can be taken. Traders who hold their positions for a week or two may consider the following business. Go to Shorts at current levels and collect shorts at 17,670. Keep the stop-loss at 17,780. Reduce the stop-loss to 17,510 as soon as the contract drops to 17,420. Move the stop-loss to 17,410 as soon as the contract drops to 17,360. Book gains at 17,280.
The Nifty 50 April futures contract will need to break above 17,730 decisively to become bullish. But it looks unlikely as the contract has fresh sales interest at high levels.
Business Strategy: Intraday traders may stay away from the market. Positional traders are now lower and may go to rallies at 17,670. Keep the stop-loss at 17,780 for the 17,280 target. Reduce the stop-loss to 17,510 as soon as the contract drops to 17,420. Move the stop-loss to 17,410 as soon as the contract drops to 17,360.
Support: 17,500 and 17,400
Resistances: 17,630 and 17,730
April 13, 2022