Trade Setup for April 22: Nifty looks to extend strong recovery amidst Wall Street sell-off

The Indian equity market continues its strong recovery, with the Nifty 50 index gaining for the fifth consecutive session on Monday, marking its longest winning streak in a month. The market sentiment remains positive, as long as the Nifty sustains above the critical moving average. With the Nifty surpassing the key resistance level of 24,100, analysts are optimistic about the index's potential to reach the 24,450–24,500 range in the short term.

The Nifty closed at 24,125, up 273 points or 1.15%, after opening with a 100-point gap and rallying during the early and mid-session. Although the index entered a range-bound phase towards the close, the broader market remained strong, with the Nifty Mid-cap 100 and Nifty Small-cap 100 both gaining over 2%. Midcap banks also saw solid buying, with most stocks closing up 4-5%.

The rally was driven by strong performances from heavyweight stocks, bolstered by solid earnings reports, positive commentary from key banks, and sustained foreign fund inflows. Both HDFC Bank and ICICI Bank posted better-than-expected quarterly results, contributing to the gains in the Nifty Bank index, which reached an all-time high.

Looking ahead, market participants will focus on earnings reports from several companies, including HCL Technologies, Mahindra & Mahindra Financial Services, Havells India, AU Small Finance Bank, Tata Communications, Waaree Energies, and Cyient DLM, among others.

Meanwhile, global markets faced a sell-off, as the US stock market fell sharply on Monday. The Dow Jones Industrial Average dropped by 925 points (2.4%), while the S&P 500 and Nasdaq Composite both lost over 2%. The sell-off was partly driven by President Trump’s criticism of Federal Reserve Chair Jerome Powell and the lack of progress in global trade talks.

In the Indian market, both foreign and domestic institutional investors were net buyers in the cash market on Monday.

Key Levels to Watch:

The immediate resistance for Nifty is at 24,200, and a move above this level could lead to a rally towards 24,550.

Immediate support for the Nifty is placed at 23,900.

For the Nifty Bank index, support is at 54,250, and the uptrend remains intact as long as this level holds.

Stocks to Watch:

HUL has completed the acquisition of a 90.5% stake in Uprising Science for ₹2,706.44 crore.

Brigade Enterprises has signed a joint development agreement for a project in Malur, East Bengaluru, spanning 20 acres, with a gross development value of ₹175 crore.

Tata Power Renewable Energy, a subsidiary of Tata Power, has signed a Power Purchase Agreement with Tata Motors to set up a 131 MW wind-solar hybrid project.

The market will be closely watching these developments ahead of Tuesday's trading session.