Indian Market Volatility: Nifty Support Levels & Key Economic Indicators

The Indian equity market continues to experience high volatility, driven by weak global cues. Renewed concerns over trade tensions and fluctuating US policies are creating a challenging environment. After a sharp rally of 700 points in the past 4-5 sessions, the Nifty has seen profit booking over the last two sessions, following a test of the major gap-down area on the weekly chart and the 20-day EMA. Immediate support for the Nifty is positioned at 22,200-22,100, and sustaining above this level is crucial for a potential continuation of the pullback towards 22,800-23,000 in the upcoming week. This week, attention should be paid to key economic indicators, including US and India CPI data, as well as India's IIP data.

From a short-term perspective, Nifty has strong support at 22,000-21,700 levels.

The long-term 100-week EMA, which has historically acted as key support during major corrections, is placed around the 22,000 levels

A rising demand line supports joining the lows of Jun’22 (15,183) and Mar’23 (16,828) placed at 21,900 levels

The confluence of the previous major low of Mar & Apr 2024 and the key retracement level of the previous rally is placed around 21,800.

Other factors that support the market in the current scenario:

US Dollar Index: The US Dollar Index has slipped below 105-106 levels and is forming a lower high-low in the weekly chart, thus supporting emerging markets.

Brent Crude: The sustained price below the $72-75 mark is positive for India's economic outlook.

The US 10-year Treasury yield has dropped to its December low, currently standing at 4.25%. This decrease in yield will have a positive impact on emerging markets like India.