Market outlook: Nifty50 likely to open in green; use dips to buy

Indian market ended the expiry day of April derivative series on a positive note as the Nifty ended gaining 47.25 points or 0.45 per cent. The session on Thursday remained absolutely quiet, contrary to expectations.

Expiry-led volatility was expected but the market spent the entire session in a 20-point range. It was only the last 30-minute of the trade that saw some spurt, majorly driven by short covering.

We expect the upmove to spill over to Friday as well. With a caveat that we do not have any overnight weakness in the global markets, we are likely to see a modestly positive opening, though the 10,650-mark will continue to pose immediate resistance.


Friday is likely to see the levels of 10,650 and 10,735 acting as immediate resistance levels. Supports will come in at 10,575 and 10,540 zones.

The Relative Strength Index (RSI) stands at 63.8754. A bearish divergence is observed as while Nifty has marked a fresh 14-period high, RSI did not. Daily MACD continues to remain bullish, while trading above its signal line.

Pattern analysis of the daily charts shows the market is accumulating in a narrow sideways trajectory after testing its important pattern area resistance. After more than 500-point upmove from the immediate lows, the Nifty is just remaining sideways after testing resistance and is showing no signs of any retracement.

A sideways movement after a strong pullback often translates into a base formation for further upmove. Also, the new series is likely to start on much lighter note as well.

Contrary to the short positions that were being piled up in the current month, long rollovers were witnessed in the next month. However, we still have to exercise some caution until the levels of 10,650 is taken out with conviction. We reiterate to continue to utilise dips into making fresh select purchases.

A cautiously positive outlook is advised for the day.

STOCKS TO WATCH: Good technical set up is observed in stocks like ONGC, CG Power, Hindustan Zinc, Greenply, Jaibharat Maruti, Escorts, TD Power Systems, NTPC, IIFL Holdings and Godrej Industries.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)