Trade Setup for April 25: Nifty 50 bullish in the short-term; Buy on dips

The Nifty 50 index remained relatively flat during trading, ending on a muted note after a strong seven-day winning streak. Despite this, analysts suggest that short-term sentiment remains positive, though signs of market fatigue are starting to emerge.

Market Summary:

After opening on a negative note, the market briefly attempted a rebound in the early session but ultimately failed to sustain its gains. The day ended with the Nifty dropping 82 points, closing at 24,247, staying within the previous day’s trading range.

Sector Performance:

The performance across sectors was mixed. Pharma, Metals, and Media sectors saw some gains, while Realty, FMCG, and Financial Services sectors experienced losses. Hindustan Unilever (HUL) was one of the top losers within the Nifty, reporting a 4% decline in margins for the January-March quarter, despite volume growth of 2%.

In the broader market, both the Nifty Midcap 100 and Smallcap 100 indices ended in the red.

Stocks to Watch:

Attention now shifts to earnings reports from major companies such as Reliance Industries, Maruti Suzuki India, Hindustan Zinc, Dr. Lal PathLabs, and several others. Additionally, stocks like Axis Bank, Tech Mahindra, L&T Tech, and Cyient, which reported their Q4 results post-market hours, are likely to be in focus.

Nifty 50 Technical Outlook:

Despite a flat closing, the Nifty 50 remains in a strong short-term uptrend, but signs of a potential correction are appearing. According to Rupak De of LKP Securities, if the Nifty sustains below 22,300, a minor correction could push it towards 21,900. On the upside, resistance levels are seen at 24,300 and 24,500.

Nagaraj Shetti of HDFC Securities believes that any consolidation or minor dip could quickly reverse, with the Nifty heading towards a target of 24,550 and beyond. Dips to the 24,100-24,000 range could present buying opportunities.

Vinay Rajani of HDFC Securities advises traders holding long positions to protect them with a stop-loss at 24,119, with positional support near 23,900. On the upside, resistance is expected around 24,360 and 24,545.

Outlook:

With major earnings announcements expected, traders are advised to remain vigilant and consider buying on any dips, especially if the Nifty reaches support levels.

Disclaimer: We recommend consulting a financial expert before making any investment decisions.