Nifty 50 Market Performance Report April 11 and Possible Trades April 12, 2024

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Executive Summary:

The recent market dynamics have been characterized by a robust rebound, with indices closing above crucial resistance levels and forming a consistent pattern of higher highs and higher lows. On April 10, the BSE Sensex surged by 354 points to reach 75,038, while the Nifty 50 climbed by 111 points to attain a level of 22,754. Despite encountering moderate corrections and volatility, the overall sentiment favours the bulls.

Technical Analysis:

The Nifty is currently confronting a significant resistance barrier near the 22,800 level, delineated by the ascending resistance trend line and the 1.618 percent Fibonacci extension. However, there is a conspicuous absence of noteworthy reversal signals at this juncture, indicating the potential for further upward movement if the index decisively breaches the 22,800 mark. Immediate support is anticipated around the 22,615 level. While a high wave type candle pattern has emerged amidst sideways trading, its predictive value remains constrained within the prevailing context.

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Options Data Analysis:

Analysis of weekly options data reveals that the 22,800 strike holds the highest Call open interest, closely followed by the 23,000 strike, signifying these levels as pivotal resistance zones. Conversely, substantial open interest is observed at the 22,700 strike on the Put side, serving as a critical support level. The Put Call ratio (PCR) surged to 1.32 on April 10, indicating an escalating bullish sentiment in the market.

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Volatility and Institutional Activity:

olatility, as gauged by the India VIX, has receded to a 5-month nadir, bolstering the prevailing bullish outlook. Foreign institutional investors (FIIs) continued to exhibit a net buying stance, while domestic institutional investors (DIIs) also participated in buying activities, further bolstering the positive market sentiment.

Expected Trade for April 12, 2024:

Given the prevailing bullish momentum and the potential for a decisive breach of the 22,800 resistance level, a bullish stance is recommended for April 12 trading. Traders are advised to contemplate initiating long positions if the Nifty sustains above 22,800, with a target set at the psychologically significant level of 23,000. However, prudently monitoring market developments, especially in proximity to key support and resistance levels, is strongly advocated. Embracing a strategy of buying on dips and selling on rallies, as advocated by Rupak De, with the implementation of appropriate stop-loss measures, could prove to be an effective approach within the current range-bound market environment.

On the Basis of Nifty 50 Pre-Open OI data ?four potential intraday trade :

Intraday Call Option Trade:

1. Strike: 23000 (Maximum Call Unwinding)
2. Trade Type: Buy Nifty Call Option
3. Entry: Enter the trade if Nifty starts to move upwards and breaches a resistance level, indicating a bullish momentum continuation.
4. Exit: Exit the trade when Nifty reaches a resistance level or shows signs of reversal.
5. Stop Loss: Place a stop-loss below the recent swing low or a certain percentage below the entry point.
6. Intraday Put Option Trade: Strike: 22700 (Meaningful Put Writing) Trade Type: Buy Nifty Put Option Entry: Enter the trade if Nifty shows weakness and approaches the support level around 22700, indicating a potential bounce. Exit: Exit the trade when Nifty rebounds from the support level or reaches a predefined target. Stop Loss: Place a stop-loss below the support level or a certain percentage below the entry point.
7. Intraday Short Trade: Strike: 23300 (Meaningful Call Writing) Trade Type: Short Sell Nifty Futures or Sell Nifty Call Option Entry: Enter the trade if Nifty faces resistance near the 23300 level and starts to show signs of reversal. Exit: Exit the trade when Nifty breaks below a support level or shows signs of upward momentum. Stop Loss: Place a stop-loss above the recent swing high or a certain percentage above the entry point.
8. Intraday Long Trade: Strike: 22400 (Maximum Put Unwinding) Trade Type: Buy Nifty Futures or Buy Nifty Put Option Entry: Enter the trade if Nifty approaches the support level around 22400 and starts to show signs of rebounding. Exit: Exit the trade when Nifty reaches a resistance level or shows signs of reversal. Stop Loss: Place a stop-loss below the recent swing low or a certain percentage below the entry point.

These trade levels should be adjusted according to intraday market dynamics, price action, and individual risk tolerance. It's essential to monitor the market closely and adapt the trades accordingly to manage risk effectively.

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Disclaimer:

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The information provided in this report is intended solely for educational and informational purposes and should not be construed as investment advice. Engaging in trading activities within financial markets carries inherent risks, and individuals are strongly encouraged to conduct their own comprehensive research and seek counsel from qualified financial advisors prior to making any investment decisions. The author and the organization bear no liability for any trading losses incurred as a result of actions taken based on the information provided herein.