Trade Setup For April 24: Nifty Gears Up For Upside Move, Low Volatility Signals Breakout Potential
India VIX, the domestic gauge for volatility, has dipped nearly 20% and hit below the 10 levels, which provided comfort to bulls.
The current market scenario suggests decreased volatility, with India VIX at 10.20, potentially paving the way for a significant upside move or range breakout. The Nifty saw rollovers of 47% with a roll cost of 0.5, indicating support around 22,350/300. Any move above 22,450 could push Nifty towards the 22,600 level.
Bank Nifty witnessed rollovers of 56% with a roll cost of 0.3, suggesting a short squeeze. Its strong support lies at 47,500, and further upside potential exists above the 48,200 level, possibly leading to levels around 48,600 to 49,000 again.
The India VIX, the domestic gauge for volatility, has dipped nearly 20% and hit below the 10 levels, which provided comfort to bulls. A minor resistance at the 61.8% Fibonacci retracement around 22,400 in the Nifty is expected to overcome, leading to a rally towards 22,500–22,600 levels. The relative strength index is holding the 50 level strongly. Immediate support remains at 22,250. Any short-term retracement will be seen as a buying opportunity, according to Om Mehra, technical analyst at Samco Securities.
Bank Nifty ended higher by 0.10% and closed at 47,970.45 as the primary trend remained strong. In the hourly chart, the index is moving up steadily with a strong base around the 47,500–47,600 zone, Mehra said.
The Nifty has staged a recovery in the last three trading sessions, retracing 61.8% of the recent correction. However, this level is viewed as an immediate hurdle for the index, making the follow-up move crucial in the upcoming sessions, according to Ruchit Jain, lead of research at 5paisa.com.
Foreign institutional investors maintain a bearish stance in derivatives, with about 65% of their positions in the index futures segment being on the short side. They have not covered these positions during the recent pullback, indicating a lack of conviction in the upward movement, Jain said.
"Also, the RSI oscillator on the daily and the weekly chart is negative, which does not give confidence for a sustained rally towards new highs. Hence, it is advisable to book some profits on trading long positions and take some money off the table. As per the options data, 22,400–22,500 is seen as a hurdle where decent open interest is seen," Jain said.
"This also coincides with the 61.8% retracement resistance mentioned above. Thus, it would be prudent to lighten up longs here and look to re-enter either on a breakout above 22,500 or on any dip. The immediate support for the index is placed around 22,200, followed by 22,030–22,000 zone," he said.
FII/DII Activity
Overseas investors stayed net sellers on Tuesday for the second consecutive session. Foreign portfolio investors offloaded stocks worth Rs 3,044.5 crore, according to provisional data from the National Stock Exchange.
Domestic institutional investors stayed net buyers for the second day and mopped up equities worth Rs 2,918.9 crore, the NSE data showed.
Markets On Tuesday
The benchmark equity indices ended a little higher on Tuesday as shares of Bharti Airtel Ltd. led the gains, but the upside was limited due to losses in Reliance Industries Ltd. The NSE Nifty 50 closed 31.60 points or 0.14% at 22,368.00, while the S&P BSE Sensex was 89.83 points or 0.12%, higher at 73,738.45.
During the day, the Sensex rose as much as 0.56% to 74,059.89 and the Nifty jumped 0.50% to 22,447.55.
Major Stocks In News
Tata Consumer Products (Consolidated, YoY)
Revenue up 8.51% at Rs 3,927 crore vs Rs 3,619 crore (Bloomberg estimate: Rs 4,003 crore).
Ebitda up 23.04% at Rs 630 crore vs Rs 512 crore (Bloomberg estimate: Rs 614 crore).
Margin expands 189 bps at 16.03% vs 14.13% (Bloomberg estimate: 15.30%).
Net profit down 22.53% at Rs 268 crore vs Rs 346 crore (Bloomberg estimate: Rs 343 crore).
Board recommends a dividend of Rs 7.75 per share.
Exceptional loss of Rs 216 crore.
Mahindra & Mahindra Financial Services: The company approved raising the borrowing limit to Rs 1.3 lakh crore from 1.1 lakh crore by way of the issue of NCDs or any other securities or instrument in one or more tranches, subject to the approval of the shareholders of the company.
NHPC: The company signed a supplementary joint venture agreement with JV Partners of the National High Power Test Laboratory, i.e., NTPC, Powergrid, DVC, CPRI, and NHPTL, for the sale of a partial stake in NHPTL for a consideration of Rs 1.31 crore.
Top Brokerages Call
CLSA On Tata Consumer Products
CLSA rates Tata Consumer Products with 'underperform'. The target price is Rs 1,288 apiece.
Ebitda margins beat estimates due to higher coffee prices.
India business grew 10% year-on-year, 7% on a like-to-like basis.
India beverages grew 3%, with flat tea volumes year-on-year.
Salt grew by 5% with volume growth of 3%.
Tata Starbucks revenue grew by 7% year-on-year.
Nomura On Reliance Industries
Nomura maintains 'buy' on Reliance Industries Ltd. and raises target price to Rs 3,450 apiece.
The fourth-quarter consolidated Ebitda a tad above brokerage estimates.
Estimates refining margins to have increased to $11.7 per barrel.
Broadly retains Ebitda estimates for fiscals 2025, 2026.
Commencement of new energy operations to be key event in upcoming quarters
Optimistic outlook on all segments.
Global Cues
Markets in the Asia-Pacific region rose, tracking overnight gains on Wall Street and as declining business activity in the world's largest economy supported hopes of rate cuts by the Federal Reserve this year.
The Nikkei 225 was trading 736.35 points or 1.96% higher at 38,288.51, and the KOSPI Index was trading 44.76 points or 1.71% up at 2,667.78 as of 06:48 a.m. Investors also wait for Australia's inflation figure, which is due to be published later on Wednesday.
A rally in tech heavyweights lifted the broader US stock market, with the group’s high-stakes earnings seen by Wall Street investors as a major test of the bull run in equities, Bloomberg said. The S&P 500 Index and Nasdaq Composite rose 1.20% and 1.59% respectively as of Tuesday. The Dow Jones Industrial Average rose 0.69%.
The Brent crude was trading 0.09% higher at $88.51 a barrel. Gold fell 0.09% to $2,319.87 an ounce.
Rupee
The Indian rupee closed stronger against the US dollar on Tuesday after the decline in Brent crude a day earlier supported the local currency.
The currency strengthened three paise to close at Rs 83.34 against the greenback. It had closed at Rs 83.37 a dollar on Monday, according to Bloomberg data.
