Nifty and Banknifty prediction for next week (3rd to 7th April)

Nifty and Banknifty prediction for next week (3rd to 7th April): The Indian stock market ends the week on a very pleasing note. A tremendous US-led global rally helped Nifty 50 and Nifty Bank close the week on a strong note. But the price action of the Indian benchmark indices was not a rosy one before the rally above key supply zones. 

Nifty and Banknifty Movement of the week(27th to 31st March)

The Nifty 50 and Nifty Bank indexes had a strong performance last week. Last week was a promising one for Nifty and Banknifty, as they both posted gains of 2.5% and 3.7%, respectively. The weekly closing prices of the Nifty and Bank Nifty were 17359.75 and 40608.65, respectively.

The Nifty began the week with a doji candle, which was followed by a red candle. However, the next day saw a green candle on a closing basis. The last day of the week started with a gap-up open in Nifty above 17210, and it closed the week on a very strong note at 17359.75.

The Banknifty demonstrated remarkable resilience throughout last week, outpacing the Nifty. Despite a single negative closing, it remained steadfast in its positive momentum. The last three days of the week were particularly impressive, with the Banknifty surging ahead.

The final day of the week was a standout moment for the Banknifty, as it soared by an incredible 1.75%. After a fierce battle between the bulls and bears, the Banknifty closed the week above the key threshold of 40,500. 

Global Market This Week

Stocks on Wall Street had a good day on Friday, with a rise of over 1%. The Nasdaq had its best quarterly gain since June 2020, because inflation seemed to be cooling down. This made people think that the Federal Reserve might stop raising interest rates so much.

The S&P 500 went up and had a second quarter of gains. The technology sector had the biggest rise, going up by 21.5% in the first three months of the year. Some banks had trouble earlier this month, and people were worried it might cause a bigger problem, but the stock market still did well.

For March, the Nasdaq went up 6.7%. In the first quarter of the year, the Nasdaq rose by 16.8%, which is the biggest gain in a quarter since June 2020. The S&P 500 went up by 7%, and the Dow went up by 0.4% in the first quarter.

Indian Stock Market Prediction for Next Week (April 3rd to April 7th, 2023)

Nifty Prediction for Next Week(3rd to 7th April 2023)

Nifty 50 Weekly Pivots

Let’s take a look at the resistance levels for Nifty on the chart. The previous gap of 17530–17570 serves as a crucial resistance level. If Nifty manages to break above this level, the next resistance levels to watch out for are 17770 and 18000.

On the other hand, several support levels could come into play in the event of a bearish reversal. The initial support level is located at 17210–17200. But we can see a gap of 17130 as the next support.

The next important support level is at 16950–16900. If Nifty breaks below this level, it may test the support level of 16840–16800.

Still, Nifty is currently in a lower-high formation on the hourly chart. It indicates that the bearish momentum persists. However, we need to look at the price action of Nifty above the gap of 17530–17570. It is important to note where Nifty started its major fall in March.

Nifty is still trading in an uptrend on the weekly chart. But the daily chart structure is not yet rosy. Only a close above 17550 will significantly increase buying momentum. This will be a falling wedge breakout pattern on the daily chart.

Exponential Moving Averages of Nifty 50 on Hourly Chart

Fibonacci Retracement Levels of Nifty 50 on Hourly Chart

Therefore, if Nifty manages to break above the resistance levels and continues its bullish momentum, we could see a target of 17570–17800 for next week. However, if it fails to break above the resistance levels and undergoes a bearish reversal, the target could be around the support levels of 17200 and 17130. It is important to keep an eye on the price action of the Nifty and how it behaves around these levels. If Nifty breaks these, then we may even expect a level around 16900 or below 16900 again. 

Banknifty Prediction for Next Week(3rd April to 7th April 2023)

Nifty Bank Weekly Pivots

Let’s analyze the resistance and support levels for Banknifty as per the chart. The crucial resistance level for Banknifty is the previous gap of 40850–41200. If it manages to break above this level, the next resistance level to watch out for is 41,660.

If we see a bearish reversal, several support levels could come into play. Banknifty’s first support level is at 40200, and there is a subsequent gap at 40050. 

The next important support level is at 39600–39270. If Banknifty breaks below this level, it may test the support level of 38920.

It’s important to note that Banknifty is currently in a lower-high formation on the hourly chart. This indicates that the bearish momentum may continue structurally. However, we need to look at the price action of Banknifty above the gap of 40850–41200.

Although Banknifty is still in an uptrend on the weekly chart, the daily chart structure is not as positive. A close above 41000 on the daily chart would mark a falling wedge breakout pattern, leading to a significant increase in buying momentum.

Exponential Moving Averages of Nifty Bank on Hourly Chart

Fibonacci Retracement Levels of Nifty Bank on Hourly Chart

Based on the current analysis, if the bullish momentum of Nifty Bank persists, we could see a potential target of 40850–41200–41600 for next week. The target price above this level will be ambitious and will be 42000. But, in case of a bearish reversal where it fails to break above the resistance levels, the target could be around the support levels of 40200 and 39800. The worst-case target will be 39600–39200.

India VIX

A sharp decline in volatility, with the India VIX dropping by 15.12% to 12.94, is a cause for caution in monitoring the market’s movements. So, writing options will be as dangerous as committing suicide in this range. Options buyers may make proper plans for next week to gain good profits. Option sellers must take precautionary measures to avoid a sudden spurt in the VIX. 

Option Chain Data of Nifty and Banknifty

The option chain data for Nifty’s April 6, 2023, weekly expiry shows a bullish market sentiment with the highest open interest at 17700 CE and 17000 PE. Aggressive buying of out-of-the-money (OTM) calls and significant selling of OTM puts support this outlook.

Similarly, for Banknifty, the highest open interest at the 40500 strikes for both call and put options, along with a significant amount of call buying and put writing, suggests an extremely bullish sentiment. Traders are also showing interest in buying and selling Banknifty’s out-of-the-money (OTM) calls and puts.

Domestic and Global Events for Next Week

Global Market Next Week

Given the recent rally and gains in the US stock market, it’s possible to anticipate an optimistic view for the upcoming week. The signs of inflation cooling down and the potential easing of interest rate hikes by the Federal Reserve may continue to drive the market higher.

The technology sector’s strong performance in the first quarter could potentially continue leading the gains, with other sectors possibly following suit. Although concerns have been raised regarding bank stocks after the recent collapses. But the overall trend of the market has remained positive, indicating that any issues may be contained.

If the positive momentum persists, we may see another week of gains in the global markets, led by the US stock market. However, it’s crucial to keep in mind the geo-political developments as well.

Crude Oil

Saudi Arabia and other OPEC+ oil producers announced on Sunday that they would cut their production by around 1.15 million barrels per day. The unexpected move aims to maintain market stability.

The cut in oil production may cause oil prices to rise, which could impact the global stock market and may also decrease the possibility of a decline in global inflation rates.

RBI Monetary Policy

Investors are eagerly awaiting the RBI MPC meeting on April 6, 2023. Inflation in India has been going down because of lower food and energy prices. The RBI governor has the challenging task of balancing inflation and growth due to the hawkish policies of other central banks.

Some experts predict a 25-basis point hike, while others expect a pause. A future pause will be well-received by the market. Shaktikanta Das will be keeping a close eye on crude oil prices and delivering a balanced speech.

Conclusion

The current market outlook is positive, with Nifty and Banknifty both trading above their weekly pivots and EMAs, and the put/call ratio indicating a bullish trend. However, it’s important to stay vigilant as upcoming events like the RBI’s rate decision and global macroeconomic data may affect market trends.

Additionally, geopolitical tensions involving Russia, Ukraine, and China-Taiwan could also impact the market. While technical indicators suggest a bullish trend for next week, it’s crucial to exercise caution and be alert for any potential shifts in the market. The main strategy for next week will be to adopt a “buy on dips” approach.

Please note that all levels discussed above, including those for Nifty and Banknifty, are spot prices.

Chart Credit: Chartink

Disclaimer: To learn additional information about the disclaimer, please refer to the “Disclaimer Page.”