The market has been making a spectacular movement on a continuous basis. It closed nearly 160 points higher compared to the previous day, showing strong momentum. The index touched the crucial 23,400 level but faced some resistance at that point, eventually closing around the 23,350 mark which tomorrow the crucial for Trade setup
As discussed in the previous blog, the 23,800 level is a key point to watch. If the market moves further, it is important to monitor how Foreign Institutional Investors (FII) react. As expected, FII has been making a significant contribution to the stock market with robust buying of over ₹7,400 crore, while Domestic Institutional Investors (DII) were net sellers at ₹3,200 crore.
The market opened flat but continued to strengthen, gaining nearly 200 points and reaching approximately 23,400. However, in the second half, it struggled to sustain above 23,500. Looking at the past week’s performance, the market has not closed below the one-hour candle low since the rally started, indicating its strong momentum.
With this being the fifth consecutive day of gains, Nifty 50 has recorded its highest weekly bounce since 2021, rising by 4.26% this week, despite weak global cues.
Global Market Analysis for Trade setup
Concerns over the U.S. economy and potential trade war escalations are keeping Nasdaq in a consolidation phase. While the Indian market is experiencing strong momentum, Nasdaq has remained range-bound for the past two weeks. The U.S. Federal Reserve has maintained a softer stance, assuring two rate cuts in 2025.
Tariff escalations have also come into play as former U.S. President Donald Trump recently announced a reciprocal tariff set to be implemented on April 2, calling it the “Liberalization Day” of the U.S. economy. Meanwhile, geopolitical tensions have intensified, with Russia launching more attacks on Ukraine.
Global markets are now awaiting the developments on April 2 to assess how different countries respond and how these actions impact domestic and international businesses. Experts, traders, and global corporations are closely monitoring the situation.
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FII and DII Activity & Option Chain Analysis
FII and DII Activity
Significant buying by FII is driving the market faster than most traders anticipated. On Friday, FII bought ₹7,400 crore worth of equities, making it a “Great Friday,” while DII continued as net sellers for the second consecutive day with sales of ₹3,400 crore.
This kind of data is boosting retail traders’ confidence in the cash market. In the past three months, FII buying has exceeded ₹7,000 crore, a figure not seen in a long time. The last highest buying was ₹4,400 crore, making this the strongest FII buying trend of the year.
So far this month, net selling has reached ₹15,000 crore, but with one more month to go, this could reduce further. For perspective, January saw ₹87,000 crore in net selling, while February recorded ₹58,000 crore.
Option Chain Analysis
Strong momentum in Nifty 50 has put call writers under pressure, while put writers are benefiting from the rally. Currently, Nifty’s movement remains undecided, and with the week just beginning, no strong resistance has been seen in the monthly contract.
A deeper look shows that the 23,500 level has the highest resistance, with approximately 93,000 contracts. Meanwhile, the 23,600 level has even more resistance, with over 112,278 contracts.
On the support side, the 23,200 level has strong put writing with nearly 95,000 contracts. The biggest support lies at the 23,000 level, where there are over 172,000 contracts.
For a simpler outlook, the 23,600 level is a key resistance with 1.12 million contracts sold by call writers. On the support side, the 23,200 level holds around 95,000 put contracts, making it a short-term support level.
Domestic Market Analysis for Trade setup
The Indian market has been moving strongly, primarily driven by FII. There are no major global cues supporting this rally, and no clear updates on tariff developments worldwide. However, the market has been in a consolidation phase for the past six months.
This rally is being led by financial services stocks, which have the highest weightage in Nifty 50. The IT sector, which generates nearly 60% of its revenue from the U.S., is the second-largest sector by weightage. Financial services companies, with their India-focused business models, are currently driving the market higher.
A key factor to watch is how much financial services stocks can continue supporting Nifty 50’s rally in the coming weeks.
The RBI repo rate meeting is scheduled, with a high probability of a rate cut. Inflation data has come down, boosting confidence for a possible interest rate cut.
Implementation of reciprocal tariffs by the Trump administration on Indian exporters is expected next week. This could impact Indian companies exporting to the U.S.
Nifty 50 Prediction
One notable observation in the Nifty 50 chart is that for the past five days, the market has closed near its daily highs, forming strong bullish candles. This indicates the dominance of bulls in the market.
Looking at levels, 23,800 appears to be an attractive target. However, the market is yet to break the lower high structure, which means a reversal could occur at any point. Traders should watch for price action signals to confirm a breakout or reversal. If the market sustains its current trend, we could see a move toward 23,800.
Conclusion
The market has shown a steep uptrend despite a lack of support from global cues. FII buying has been a key driver of this rally. The coming week will be crucial in determining how FII reacts and whether this momentum continues.
Concerns over U.S. economic growth could put pressure on the IT sector, which is the second-largest contributor to Nifty 50. If financial services stocks continue supporting the market, the IT sector will be the next key watchpoint. If IT stocks weaken significantly, they could drag the market lower. The upcoming week will be crucial in determining the market’s next move.
