By Anand James
The headwinds that Nifty faced through the last week was not surprising given the long stretch of uptrend that has now stretched almost 1000 points since late March 2023. After achieving the much awaited target of 17800, we had wanted to stretch it a bit further, but Infosys’ Q4 led collapse last Monday single handedly stopped Nifty on its tracks, nipping out hopes of tailwinds kicking in.
Friday’s penetration of the 200 DMA need not be taken as a bear call, as this is not a level that assumes significance towards short term trend reversals, and for good measure, we did see a close back above this level by the day’s close. We see 17,500/440 as a stronger support while not expecting a collapse unless 17,370/270 gives away. Alternatively, if 17,700/740 is cleared on the upside, the 17,830-17,796 objectives should be achieved quickly, while also rekindling hopes of 18,300.
However the major challenge would not be one of a collapse that was threatening to unfold last week. But, it would be one of lack of bigger trading ranges, that has spoiled the strategies employed by both directional traders as well as volatility traders. VIX has sunk to 11.63 by Friday’s close, and we will look forward to US GDP release to trigger a momentum in Indian stocks, but as is, April is heading for a muted expiry, with only low prospects for a breakdown.
(Anand James, Chief Market Strategist at Geojit Financial Services. Views expressed are author’s own. Please consult your financial advisor before investing.)