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Nifty

• The Nifty started monthly expiry session with a positive gap (18267- 18326) and marched northward as intraday dips were bought into. The fag end buying demand helped index to resolve above recent consolidation (18400-18100). The daily price action formed a sizable bull candle carrying higher high-low, indicating continuance of positive bias.

• Going ahead, we reiterate our constructive stance of Nifty challenging alltime high of 18600 and gradually head towards 18900 by December 2022. The index has resolved out of past two weeks trading range 18400-18100 underpinned by across sector participation, indicating rejuvenation of upward momentum. In the process, we expect broader market to witness catch up activity against benchmark. Thus, dips should be capitalised on as an incremental buying opportunity. Our positive stance is corroborated with following observations:

• a) the index rallies are getting bigger with shallow retracements after breakout from past one year down trending channel indicating inherent strength

• b) sharp reversals in Dollar index, US yields have helped to taper down anxiety around further aggressive rate hikes, which is supportive for equities globally and also domestically

• c) Brent crude prices continued their down trend in well channelled manner which is supportive for Indian equities

• d) India VIX continued its lower high-low for eighth week and stayed at multi month low indicating low risk perception among participants

• Structurally, breakout from higher base formation above 20 days EMA signifies elevated buying demand that makes us confident to revise support base at 18100 as it is confluence of: a) as per change of polarity concept earlier resistance of 18100 would now act as key support b) 20 days EMA is placed at 18143 c) lower band of recent consolidation is placed at 18133

• The broader market indices have lagged large caps over past couple of weeks. Structurally they are undergoing higher base formation above their 100 and 200 day averages. Both indices have retraced their 11-week rally from June lows by just 38% in equal time. Shallow retracement indicates inherent strength and we expect both indices to resume uptrend in December as they approach price/time maturity of correction

• In the coming session, index is likely open on a flat note tracking muted global cues. We expect index to trade with a positive bias while maintaining higher high-low formation. Hence, intraday dip towards 18560-18592 should be used to create intraday long positions for target of 18680

Nifty Bank

• The daily price action formed a bull candle which maintained a higher high -low signalling continuation of the positive momentum

• We expect the index to maintain positive bias and head towards 43500 levels in the coming week being the 138 . 2 % external retracement of the September 2022 breather (41840-37387). The recent strong up move has led to weekly stochastic at an overbought territory (93 ) . We believe dips should be used as a buying opportunity with strong support placed around 41500 levels

• Bank Nifty/Nifty ratio line is in steady up trend and is seen rebounding after retesting its 15 months range breakout area, indicating strength and continuation of the outperformance

• Structurally, in the Bank Nifty rallies are getting faster and stronger while corrections are shallow, underpinning inherent strength highlighting robust price structure

• The Bank Nifty has support at 41800 mark being the confluence of the (a) 23 . 6 % retracement of the last seven weeks up move (37387 -42860 ) placed at 41780 (b) the 10 weeks EMA currently placed at 41230 levels (c) the upper band of the recent eight weeks range breakout area placed around 41800 levels

• In the coming session index is likely to open on a flat to positive note amid firm Asian cues . We expect the index to continue with its positive momentum while maintaining higher high -low . Hence after a positive opening use intraday dips towards 43130 -43210 for creating long position for the target of 43470 , with a stoploss of 43020

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