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Nifty: 17610

Technical Outlook

• The Nifty recouped initial losses and consolidated in a 150-point range throughout the day. As a result, daily price action formed a small bull candle confined within last session’s trading range, indicating indicating pause in downward momentum while intraday pull backs were short lived. In the process, broader markets relatively outperformed as Nifty midcap, small cap gained 0.2% and 0.6%, respectively

• Going ahead, prolonged consolidation in the range of 18000-17300 above 200 days EMA would result in a base formation at key supports while absorbing Fed event and concerns about banking NPAs. In the process, stock specific action would prevail amid progression of earning season. The extended correction from here on should be capitalised on to accumulate quality stocks in a staggered manner as we believe strong support is placed in the range of 17500-17300, being confluence of key long term moving averages like 200 days EMA and 52 weeks EMA. Meanwhile, on the upside psychological mark of 18000 that coincides with Budget day high and 20 days EMA, would act as immediate resistance. The following points validate our stance of pullback:

• a) the Nifty is approaching its price and time wise maturity as it entered ninth week of correction against nine week’s rally (16748-18887) seen during September 2020 to January 2021 wherein it retraced 61.8%, highlighting robust price structure .

• b) US Dollar index maintained lower high-low on the weekly chart and sustained below 102, indicating continuance of corrective bias. Indian equities have an inverse correlation with the US dollar index. Thus, weak dollar leads to higher foreign inflows

• c) globally, major equity markets have remained in an up trend. We expect domestic markets to perform in tandem with global peers

• Structurally, the index has been undergoing slower pace of retracement, indicating robust price structure. We believe ongoing corrective move would get anchored around strong support zone of 17500—17300, as it is confluence of: a) 80% retracement of OctoberDecember rally 16748-18887 b) Price parity of December decline (18887-17774) projected from last week’s high of 18201 is placed at 17140 c) Key long term moving average like 200 EMA & 52 weeks EMA is placed at 17550 and 17375, respectively

• In the coming session, index is likely to open on a flat note amid mixed Asian cues. We expect, index to prolong ongoing consolidation with a stock specific action amid elevated volatility. Thus, intraday dip towards 17600-17632 should be used to create intraday long positions for target of 17719

 Nifty Daily Candlestick Char

Nifty Bank: 40669

Technical Outlook

• The daily price action formed a bull candle which remained contained inside previous session price range . The index opened lower however recovered as the session progressed and closed marginally higher by 0 . 4 % signalling continuation of the consolidation amid stock specific activity

• Going ahead we expect the index to extend the current consolidation in the broad range of 39500 -42000 amid elevated volatility, we expect the index to hold the key support zone of 39400 -39700 . Thus, we believe corrective decline from here on should be used as buying opportunity in quality banking stocks

• Key point to highlight is that the ongoing secondary correction (11%) of the last eight weeks has hauled weekly stochastic oscillator near oversold territory with a reading of 23 . Structurally, over past eight weeks, the index has undergone shallow retracement of 65 % of its preceding 10 weeks rally of October –December (37387 -44151 ) indicating inherent strength

• The Bank Nifty has key support at 39400 -39700 marks as it is the confluence of the following technical observations : (a) 61 . 8 % retracement of the previous major rally (37387 -44151 ) at 39970 (b) the presence of long term 200 days EMA is also placed at 39795 (c) Price parity with the previous major decline of September 2022 (41840 -37387 ) as projected from the December 2022 all time high of 44151 also signals support at 39500 levels

• The weekly stochastic remain in downtrend, however approaching oversold territory with a reading of 23 signalling supportive effort likely in coming weeks In the coming session, the index is likely to open on a flat to positive note amid firm global cues . We expect, index to consolidate with positive bias . Hence use intraday retracement towards 40510 -40580 for creating long position for the target of 40830 with a stoploss of 40390

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