Yesterday's Recap: As anticipated, NIFTY traded within a defined range for most of the April 23rd session. This followed our prediction of a consolidation phase after the breakout above the previous swing high of 22,340.
Current Market Structure: The breakout above 22,340 suggests a potential shift in market structure. However, prices are currently seeking a retracement to establish a new price action pattern.
Trading Plan for April 24, 2024:
Gap Up Opening Above 22,475:
If the index opens and sustains above 22,475, or finds initial support at 22,340 before moving back above 22,475, this indicates buying pressure overcoming selling pressure.
In this scenario, NIFTY could trade higher towards the next resistance level of 22,561.
Conversely, a failure to hold support at 22,340 could lead to a sharp decline towards the 22,274 - 22,234 - 22,208 zone, which may then act as support.
Flat Opening:
Given the recent breakout, a retracement is likely. Prices may pull back towards the 22,274 - 22,234 - 22,208 zone if they face rejection at 22,393 or trade below 22,320 on opening.
Alternatively, a move above 22,475 would signal buying pressure absorbing supply in the 22,392 - 22,475 zone, potentially paving the way for a further rise towards 22,561.
Gap Down Opening Below 22,300:
Initial support could be found near 22,234 - 22,208. The index might then attempt a recovery towards 22,300 - 22,350 - 22,392, followed by another potential decline to establish a new support level.
A break below 22,208 could see a further downside towards 22,077.
Conclusion:
The direction of the market on April 24th will depend on the opening price action and how NIFTY reacts to key support and resistance levels. Bulls aim for a continuation of the uptrend above 22,475, while bears will look to test support zones.
Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.