NIFTY50 Ends Six-Day Consolidation, Faces Resistance at 22,800: Pre-Earnings Indicators Suggest Reversal of Fortune
Asian Markets at 7 am
As the Asian markets start to open, the NIFTY50 index is under scrutiny, with the debate centering on whether it will break free from its six-day consolidation phase. As we take a closer look at the global market trends, we find that the GIFT NIFTY is trading flat at 22,588, while the Nikkei 225 is down 0.95%, and the Hang Seng has recorded a 2.75% drop. These developments may have some impact on the NIFTY50 index, which needs to break free from its consolidation to continue its upward journey.
U.S. Market Update
The U.S. indices, on the other hand, have surrendered all their intraday gains and are trading lower at the close. This comes as a surprise, as many had expected a recovery from earlier losses. The Dow Jones is down 0.0%, while the S&P 500 and the Nasdaq Composite have recorded losses of 0.5% and 1.2%, respectively. This could have some bearing on the NIFTY50 index, which will be monitoring the U.S. market developments closely.
NIFTY50: Six-Day Consolidation and Beyond
As the NIFTY50 index broke out of its six-day consolidation range, it has formed a bearish candle on the daily chart. With the index closing 1% lower at 22,533, it is now poised to test the key support zone of 22,500-22,400. The chances of a break below this zone are high, and this could lead to further weakness in the index. On the contrary, if the index manages to hold above 22,700-22,800, it may attract more investors and push the index higher.
SENSEX: Five Consecutive Sessions of Losses
The SENSEX, another key index, extended its losing streak to five consecutive sessions, slipping over 1% ahead of its final April options expiration. The index’s technical structure remains bearish, with it closing below the key support zone of 75,600-75,200. This zone has now become immediate resistance, while the next critical support is around 73,600. The index’s 15-minute chart also shows weakness, with immediate resistance near the 75,000 zone. A decisive break of this range with a strong intraday candle could offer further directional cues.
FII-DII Activity: FIIs Sell, DIIs Buy
Foreign Institutional Investors (FIIs) continued their selling streak for the third consecutive day, offloading shares worth ₹6,286 crore in the cash market. In contrast, Domestic Institutional Investors (DIIs) provided support by purchasing shares worth ₹5,185 crore. This FII-DII activity may have some impact on the NIFTY50 index, which needs to monitor the trends closely.
Stock Scanner: Most Traded and Active Stocks
Our stock scanner reveals that long build-up is seen in Glenmark Pharmaceuticals, while short build-up is observed in LTIMindtree, Infosys, Tata Consultancy Services, ONGC, and Max Healthcare. The top traded futures contracts include HDFC Bank, ICICI Bank, Reliance Industries, Bajaj Finance, and Infosys, while the top traded options contracts consist of Mahindra & Mahindra 2700 CE, BSE 5600 PE, Dixon 13500 PE, Persistent 5500 PE, and HDFC Bank 1680 CE. Under the F&O ban is Manappuram Finance.
In Conclusion
The NIFTY50 index has broken out of its six-day consolidation range and is now facing resistance at 22,800. The SENSEX, on the other hand, is extended its losing streak to five consecutive sessions. FIIs are selling, while DIIs are buying, and the FII-DII activity may have some impact on the NIFTY50 index. As we monitor the market trends and unfold, we wait to see how the NIFTY50 index will behave in the coming days. Will it break free from its consolidation and move higher, or will it succumb to weakness? Only time will tell.
