After making a flat start, Nifty made a strong bounce back in three consecutive 5-minute candles, covering around 220 points. This movement set a solid stage for the day. Nifty faced resistance near the 22,600 level, which it has tested three times recently, forming a triple-top pattern. After that, it retested and spent the whole day in a choppy range but managed to close above the 22,500 level.
However, Nifty did not close below the 1-hour moving average, which is a significant level to consider. We will discuss this further to know Trade setup for tomorrow
Global Market Analysis
After experiencing a near 12% correction from its all-time high, Nasdaq has shown a slight recovery of 3% in the last three trading sessions. The US market remains cautious as upcoming data on Fed policy is awaited. The market is concerned about the Federal Reserve’s stance on interest rate cuts and inflation. Former President Trump has previously stated that interest rates would be lowered for various reasons, while Fed Chairman Jerome Powell has indicated that they are in no hurry to cut rates and that inflation remains a key factor in their decisions.
Recently, inflation data has been favorable for the US economy, making it crucial to see how the Fed reacts to inflation and potential rate cuts in the future.
Amid ongoing trade tensions among major global economies, the US is imposing tariffs on Canada, the European Union, and China. It will be important to monitor how these tariffs impact US consumers, inflation, and the Fed’s reaction in the coming months.
On a positive note, there are signs of progress in the Russia-Ukraine conflict, with the US and Russia reportedly set to meet soon to discuss a ceasefire. Trump remains optimistic about a deal, and resolving the conflict would be beneficial for global markets. A resolution could also help stabilize crude oil prices, benefiting Indian consumers and opening new opportunities for defense cooperation between India and Russia.
Domestic Market Analysis – Nifty Prediction
Nifty has been closing above 22,400 consistently but has struggled to break above 22,600. The market appears to be consolidating, and upcoming forecasts will depend on how the Trump administration negotiates a free trade agreement with India. Any negative news could make breaking 22,600 even more challenging, especially with the reciprocal tariff deadline set for April 2.
If no positive resolution is reached, Nifty may test lower levels. Additionally, how individual companies prepare for the sectors affected by trade tariffs will be crucial.
The Indian IT sector is under pressure and may continue to struggle as tariffs negatively impact the US economy. The performance of the IT sector will also depend on upcoming US GDP data and Federal Reserve commentary. Meanwhile, the Indian banking sector has remained largely flat over the past few sessions.
Stocks in Focus for Trade setup for tomorrow
Today, Nifty moved over 100 points, with a mix of sectoral leaders driving the gains. Dr. Reddy’s Laboratories and Bajaj Finserv were the top performers, supporting the index. However, the IT sector remained cautious, losing 1.5%.
Stocks related to stock market advisory services, such as CAMS, BSE, and CDSL, saw some buying pressure but later faced selling at higher levels. Traders do not yet see a strong recovery in these stocks, making their near-term performance uncertain.
Technical Analysis for trade setup
Nifty faced significant resistance at 22,600 and struggled to break 22,676, which has become a critical level. The index is forming a 100-point resistance zone, making it tough to move higher. On the positive side, Nifty has not closed below the 50-day moving average, which is a good sign. Today, Nifty tested 22,300 multiple times but did not close below it. The crucial support level to watch is 22,321, as a break below this level could lead to a drop toward 22,000.
FII, DII Activity and Derivatives Market
The battle between Foreign Institutional Investors (FII) and Domestic Institutional Investors (DII) continues. Today, FIIs sold over Rs. 4,488 crore, while DIIs bought Rs. 6,000 crore, pushing Nifty up by more than 100 points.
Changes in FII and DII activity are causing concerns among retail investors, leading to lower participation and confidence in the market. It remains to be seen when FIIs will start buying again, triggering a positive bounce in the Indian equity market.
Analyzing the Nifty weekly options data, the 22,500 call and put writers hold the highest positions. This suggests a strong battle at this level, making it crucial to observe how the market behaves around 22,500 in the coming sessions.
Conclusion
The market is closely watching Fed Chairman Jerome Powell’s commentary on the US economy and future interest rate decisions. The IT sector’s performance will be crucial after the Fed’s policy announcement. Additionally, the options battle at 22,500 between put and call writers will play a significant role in Nifty’s movement. While the option chain suggests a stable market, investors must remain cautious and keep an eye on the upcoming FOMC meeting and US economic data, as these will influence future market direction.
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