Trade setup April 1: Tariffs and 200 EMA support to decide the outlook for NIFTY50 and SENSEX

Asian markets @ 7 am

GIFT NIFTY: 23,458 (+0.39%)

Nikkei 225: 35,809 (+0.52%)

Hang Seng: 23,240 (+0.66%)

U.S. market update

Dow Jones: 42,001 (+1.0%)

S&P 500: 5,611(+0.55%)

Nasdaq Composite: 17,299 (-0.1%)

The US markets closed in green on Monday amid a whipsaw movement in the benchmark indices. The US markets opened up 1% lower on Monday on the Dow Jones, S&P500 and NASDAQ and closed in green on the S&P500 and Dow Jones, while NASDAQ closed with little losses. The volatility heightened as investors navigated through economic growth concerns amid escalated trade tensions.

Despite the green closing, attention remains on the tariff announcements on April 2. Some experts believe the extent of reciprocal tariffs could be less than feared. However, despite the magnitude of the tariff, the announcements will remain the key trigger for markets for the coming week.

NIFTY50

Max call OI:24,000

Max put OI:23,500

( Ten strikes to ATM, 3rd April Expiry)

NIFTY50 continued its bullish momentum for the second week in a row after bouncing back from lower levels. NIFTY50 managed to close in green after facing resistance at the previous swing high levels of 23,800, levels last touched in February 2024. The selling pressure at higher levels was primarily driven by anxiety about tariff impact of impending reciprocal tariff announcements by the US President. In addition, experts believe that profit booking at higher levels also added some pressure on the benchmark index.

On technical charts, the index formed a gravestone doji chart pattern on a weekly basis. In addition, the benchmark index also faced resistance at 50 WMA (weighted moving average) levels of 23,834, indicating a cool-off in the existing bullish trend and a reversal to a bearish trend.

On daily charts, NIFTY50 continues to trade above its short, medium and long term averages despite facing selling pressure at higher levels. Experts and Analysts believe the bearish chart pattern on the weekly charts could be negated if the NIFTY50 manages to close above the swing high levels of 23,860 in the coming week.

On the options contract level, the 3rd April expiry contracts indicate 24,000 strike as the resistance level for NIFTY50 with the highest open interest. Similarly, 23,500 remains the key support level for the index with the highest open interest.

SENSEX

Max Call OI:78,000

Max Put OI:76,500

(Ten strikes to the ATM, 1st April Expiry)

SENSEX managed to close the previous week in green with 0.72% gains amid facing selling pressure at higher levels. The index faced resistance at the previous swing high level of 78,740. The index continued its gains at the start of the week but later fell due to selling pressure by the FIIs on Friday, 28th March 2024. Tariff concerns, cautious outlook on earnings season, and some profit booking at higher levels weighed down on the sentiments

On the technical side, similar to NIFTY50, the index faced resistance at 50 WMA of 78,430 on the weekly charts. However, the 200 EMA on the daily charts remains the key support level for the index for the coming week. Experts sound cautious on the technical outlook of the index, as failure to close above the previous week’s high level could indicate a reversal in the trend pattern from bullish to bearish.

On the open interest (OI) front, the 78,000 level remains the key resistance with the highest open interest for the current week’s expiry. Similarly, 76,500 remains the key support level with the highest OI.

Foreign Institutional Investors (FIIs) snapped their buying streak on the sevent day as they sold Indian equities worth ₹4,352 crore. On the flip side, Domestic Institutional Investors (DIIs) bought equities worth ₹7,646 crore on Thursday.

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