Nifty 50 continues higher for the fourth consecutive session making fresh six week highs as the rebound from the coronavirus sell-off is intact. Asian markets closed mostly higher with Sensex the outperformer as it finished 1.89% higher at 32,720 taking it’s weekly advance to 4.5%.
Investors mood has improved after the coordinated actions from central banks and governments across the globe.
India is still under strict lockdown, but the gradual opening of some businesses in the USA and Europe also helps risky assets. India has reported 31,332 confirmed coronavirus cases while the death toll rises to 1,007.
India’s stock markets also expecting the Indian government to deliver a long-awaited relief package to support the coronavirus battered economy.
Moody’s rating agency yesterday cut India’s growth forecast for 2020 to 0.2% from 2.5% projected in March. Moody’s expect a 6.2% growth in 2021.
Nifty 50 gained over 25% since the March lows and now is approaching fast the 50-day moving average. The long term technical outlook remains bearish for the index despite the sharp rebound. A break above the 50-day moving average might cancel the recent bearish momentum.
On the upside, first resistance for the Nifty 50 index stands at 9,599 the daily top. A break above 9,599 might open the way for a test of the critical 50-day moving average at 9,882. A settlement above the 50-day moving average would open the way for a more significant rally up to 10,183 the high from March 13.
On the other hand, immediate support for the Nifty 50 index will be met at 9,382 the daily lows. The next support level stands at 9,240 the low from April 27. In case of a credible break lower then the next support is at 8,808 the lower from April 16.