Tradzo Weekly Analysis

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Nifty starts the week with gains to 22600 in the first hour, after market pulled back from the low of 22,217 to 22450 on Thursday. However the market loses gains after 10 am to 22,474 to find support near previous week’s close.

An immediate support is seen at 22450, breach of same may lead to intensify selling activity to 22000-21700 levels, while a hourly resistance is seen at 22620.
On the hourly chart a clear Trend line is visible for Nifty at 22600 level, a breakout on the same may bring bulls back in the game for technical target of 22960-23100.

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Short buildup seen in 22,500 Put with highest OI followed by 22600 Calls, Max pain at 22,550, right inside the 22,500-22,600 resistance band. A sustained move above 22,600 may trigger a reversal and open the door for a pullback towards 22,960-23100. On the downside, the 22,450-22,000 zone remains the key support.

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Momentum is improving on the daily plot compared to Thursday 1st half, Financials and Midcaps looks stronger but the overall momentum remains divided, indicating a range bound activity.

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The market resumed its downtrend towards the 23,000-22,500 zone after Nifty completed a 61.8% retracement of the entire fall from 24,752 during the consolidation. With Nifty falling to 22,217 achieving all mentioned targets.
The larger support zone has now shifted to 22200-21700, which is the valley low for ‘Double Top Formation’.

Oil prices and US & European Bond yields to remain focus points for the global markets, while inflation lead by refined products to keep the pressure on macros, unless one of the Black Sea or Hormuz released pressure from the energy flow.

Key macro risks ahead:

1.⁠ ⁠Probability of US sanction-based tariffs on India & China of up to 500%.
2.⁠ ⁠Crude and refining capacity constraints translating into inflation in downstream products; urea shortage raising food-security concerns.
3.⁠ ⁠Escalation of the US-Iran conflict to the wider West Asia region.
4.⁠ ⁠US debt and housing stress from an unwinding of the yen carry trade.
5.⁠ ⁠AI bubble - AI may be becoming popular and genuinely successful in the right hands, but for the majority it is just new dopamine, with sky-high valuations and no signs of profits.
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