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Nifty

• The weekly expiry session started with a positive gap (18758-18872). As a result, index approached near our target of 18900. The daily price action formed a small bear candle, indicating minor profit booking at higher levels. However, formation of higher high-low displays continuation of prevailing upward momentum

• The formation of higher peak and trough signifies elevated buying demand that makes us confident to revise our target to 19400 for coming weeks. Key point to highlight is that current up move is supported by improving market breadth, across sector participation that augurs well for durability of ongoing structural up trend. However, we believe the move towards 19400 would be in a non linear manner as bouts of volatility amid global development can not be ruled out. Thus, dips should be capitalised on as incremental buying opportunity as we expect temporary breather to get anchored around key support of 18300. In the process, we expect midcaps to relatively outperform and witness catch up activity against benchmark.

• Further, macro indicators like subdued crude oil prices coupled with continued weakness in Dollar index provide impetus for extension of ongoing rally. The India VIX which gauge the market sentiment continued to trade below its multi month low of 15, highlighting low risk perception amongst market participant

• We expect midcaps to relatively outperform as it logged a resolute breakout from contracting triangle after approaching maturity of price/time wise correction. This breakout has been supported by improvement in market breadth as currently >70% components of Midcap index are trading above 200 DMA which is highest since February 2022, indicating rejuvenation of upward momentum that augurs well for acceleration in catch up activity

• Structurally, elongation of rallies along with shallow retracement indicates inherent strength makes us confident to revise support base upward at 18300 as it is confluence of: a) as per change of polarity concept January high of 18350 would now act as key support b) 20 days EMA is placed at 18347 c) current week's low is placed at 18365

• In the coming session, index is likely to open on a flat note tracking subdued global cues. We expect index to maintain higher high-low formation and trade with a positive bias. Thus, intraday dip towards 18875-18907 should be used to create intraday long positions for target of 18993

Nifty Bank

• The Daily price action formed a small bear candle with a higher high -low indicating continuation of the consolidation with positive bias after sharp up move measuring 14 % in past eight weeks which led weekly stochastic at overbought territory with reading of 91

• We expect the index to maintain positive bias and head gradually towards 44600 levels in the coming weeks being the 161 . 8 % external retracement of the September 2022 breather (41840 -37387 )

• Going forward, a temporary breather cannot be ruled out which will be confirmed only on formation of a lower high -low sequence . The overall price structure remains firmly positive hence, we believe breather towards the breakout area of 41800 should be used as a buying opportunity for next leg of up move

• Bank Nifty/Nifty ratio line is in steady up trend and has recently rebounded after testing its 15 months range breakout area, indicating strength and continuation of the relative 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 -43515 ) placed at 41850 (b) the 10 weeks EMA currently placed at 41490 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 negative note tracking soft Asian cues . We expect the index to consolidate with positive bias after the recent sharp up move . Hence use intraday dips towards 43210 -43290 for creating long position for the target of 43530 , with a stoploss of 43090

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