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Pre-market commentary for April 25: The 4-day rally on the Dalal Street is likely to be tested on Thursday amid tepid global cues and anticipated volatility on account of the monthly futures & options expiry for the April series.
At 07:00 AM; Gift Nifty futures quoted around 22,365, indicating a likely gap-down start to the trading action today.
What does the Nifty options data suggests?
As per the monthly options data, the Nifty 22,500 CALL has the highest open interest (OI) followed by 22,700 and 22,600. On the other hand, the Nifty 22,000 PUT has the highest OI followed by 22,300 and 22,400.
As per Wednesday’s trading activity, the Nifty 22,450, 22,500 and 22,550 CALLs saw fresh build-up in OI, indicating likely resistance in the range of 22,490 – 22,520 levels for the day. Similarly on the PUTs, notable OI build-up was seen at 22,400, 22,350 and 22,300 Strike Prices. The price action and OI build-up in PUTs suggests, possible support range of 22,330 – 22,350; in case of a steeper fall the Nifty may seek support around 22,280 levels.
Technical view by experts
The Nifty has been hovering around the 22,400 level for the last two sessions, and finding resistance around 22,450. For the bias to improve the Nifty 50 index needs to move past the hurdle of 22,500-22,550, writes Vaishali Parekh, vice president - technical research at Prabhudas Lilladher.
Technically, the Nifty had previously left a bearish gap around 22,500 levels and is finding it difficult to sustain above it. Thus, the index is likely to pause near 22,500-22,530 levels in the short term. If the Nifty sustains above 22,530, it could attempt to break its all-time high of 22,776; otherwise, the NSE benchmark could witness consolidation in the 22,000-22,500 zone. The short-term support levels for Nifty are at 22,200 and 22,000, while resistance levels are 22,480 and 22,530, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C Mehta Investment Interrmediates in a note.
Further, Rajesh Bhosale, technical analyst, Angel One highlights that the Nifty lack of momentum, evident from the formation of a 'DOJI' candlestick pattern on the daily chart. This pattern typically signals uncertainty, particularly as it coincides with a critical resistance level of 61.8 per cent retracement and a bearish gap.
Going ahead, the 22,500 level remains a significant resistance on the monthly expiry day, but a sustained trade above 22,500-22,550 could trigger further upward movement, potentially driven by contract adjustments. Conversely, immediate support levels are identified at 22,300-22,250, with a pivotal support zone around the bullish gap of 22,200-22,180. Traders should closely monitor these levels, as a period of consolidation may precede a directional move on the expiry day.
That apart, the Nifty Next 50 index made its debut in the derivatives segment yesterday. The Nifty Next 50 provides representation to large capitalisation stocks beyond the Nifty 50 index. The index derivatives received a positive response, with more than 375 trading members participated across India.
Meanwhile, here are the other key factors that shall sway the market mood on Thursday.
Global mood: Overnight the US market ended on a flat note. However, Dow and Nasdaq futures fell sharply in post market trade after Meta Platforms stock plunged on guidance.
Thursday will be key trading session in the US as apart from the big tech earnings impact investors will also pay attention to GDP data. On Friday, Fed-preferred PCE price index report will shed further insights into the monetary policy outlook.
The US 10-year bond yield continued to quote above 4.6 per cent. Traders in the US have now pushed back hopes of a rate cut to September.
In Asia this morning; Japan’s Nikkei was down over 1 per cent. Similarly, Taiwan, Kospi and Strait Times too declined around 1 per cent each.
Individual stocks in focus
Hindustan Unilever: The FMCG major reported a slight dip of 1.6 per cent year-on-year (YoY) in consolidated net profit at Rs 2,558 crore for Q4FY24, exceeded market expectations. Revenue saw a marginal increase of 0.6 per cent YoY at Rs 15,041 crore. READ MORE
Axis Bank: The private sector lender reported a net profit of Rs 7,129 crore for the fourth quarter ended March 31, 2024. The bank had reported a net loss of Rs 5,728 crore in the March quarter of 2022-23 fiscal. Total income rose to Rs 35,990 crore from Rs 28,758 crore; and Net Interest Income (NII) grew 11 per cent YoY to Rs 13,089 crore. READ MORE
Indian Hotels Company: Posted a 29.4 per cent YoY growth in consolidated profit at Rs 438.33 crore in Q4. Total income rose to Rs 1,951.46 crore from Rs 1,654.54 crore.
Earnings calendar: Aavas Financiers, ACC, Bajaj Finance, Coromandel International, Cyient, IndusInd Bank, KPI Green Energy, Laurus Labs, LTTS, Mphasis, Nestle India, Quick Heal Technologies, Tanla Platforms, Tech Mahindra, TTML, UTI AMC, Vedanta and Zensar Technologies are among the notable companies scheduled to announce Q4 results today.
