Market Outlook for April 9: Key Developments Ahead of the Opening Bell

Market Sees 4 Percent Gain as Nifty 50 Extends Uptrend

The Indian equity market witnessed a strong session on April 8, with the Nifty 50 experiencing a 3 percent gap-up opening and closing with nearly 4 percent gains. This upmove is a continuation of the global rally following the US and Iran agreement to a two-week ceasefire, which includes safe passage through the Strait of Hormuz. The uptrend has now extended for five consecutive days.

Improvement in Technical Indicators

The Nifty 50's technical and momentum indicators have shown further improvement, with a sharp decline in the VIX and oil prices. The VIX, a measure of market volatility, fell by 20.24 percent on Wednesday to 19.70, providing comfort to bulls. A consistent fall in the volatility index toward the 14 level is necessary for bulls to feel more comfortable.

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Potential Consolidation Ahead

After a stellar run, the Nifty 50 may experience some consolidation before moving toward the 24,300-24,500 zone. However, 23,800 is likely to act as support in the upcoming sessions, according to experts.

Key Levels for Nifty 50 and Bank Nifty

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The Nifty 50 formed a healthy green candle after a robust gap-up opening, convincingly negating the lower high-lower low formation and signaling a bullish breakaway gap. The index climbed above the 10- and 20-day EMAs, both of which are now trending upward. The RSI rose to 53.89, while the MACD maintained a bullish crossover with a further rising histogram.

The Bank Nifty also recorded a long green candle on the daily timeframe after a robust gap-up opening and closed a tad below the 50 percent Fibonacci retracement of the recent fall, signaling a bullish breakaway gap. The banking index rose above short-term moving averages but remains below medium- and long-term moving averages. The RSI jumped further to 53.41, while the MACD sustained a positive crossover with further green bar expansion in the histogram.

Call and Put Options Data

According to the weekly options data, the 24,500 strike holds the maximum Call open interest (65.42 lakh contracts) for the Nifty. This level can act as a key resistance level for the index in the short term.

Funds Flow and Put-Call Ratio

The Nifty Put-Call ratio (PCR) remained unchanged at 1.13 on April 8, compared to the previous session. The increasing PCR or being higher than 0.7 or surpassing 1 indicates traders selling more Put options than Call options, generally indicating a firming up of a bullish sentiment in the market.

Short-Term Stocks to Watch

A long build-up was seen in 106 stocks, indicating a build-up of long positions. On the other hand, 7 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding. 10 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.

F&O Ban

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit. SAIL was added to the F&O ban list, while Sammaan Capital remains under the ban.