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Nifty : 19322

Technical Outlook

• The index started the week with a positive gap (19189-19234) and traded with a positive bias throughout the day as intraday dips were bought into. As a result, Nifty clocked a fresh all time high of 19345. The Daily price action formed a strong bull candle, indicating acceleration of upward momentum

• The acceleration of upward momentum post six months consolidation breakout underpinned by across sector participation signifies resumption of structural up trend that makes us confident to revise target upward at 19700 in coming month as it is 138.2% external retracement of Dec-Mar decline 18887-16828. In the process, possibility of temporary breather can not be ruled out which should be capitalized as incremental buying opportunity. Our constructive stance is further validated by following observations:

• A) Bank Nifty recorded breakout from six months consolidation (44500-38600) which would provide impetus for next leg of rally in Nifty (as Bank Nifty carries 38% weightage in Nifty)

• B) Nifty 500 has clocked a fresh all time high backed by sturdy market breadth as currently 74% stocks are trading above 200 DMA compared to previous record high (Dec-22) reading of 68, highlighting improving market breadth

• C) The current rally is supported by rising cash volume as one month’s average turnover jumped to 62000 cr. compared to May reading of 56000 cr.

• D) The persistent FII’s inflow bodes well for durability of current up move

• E) Structural improvement in global market as S&P 500 broken out of 13 months base formation

• Nifty midcap index endured with its record setting spree over sixth consecutive week. We expect broader market to continue with its relative outperformance wherein small cap would outshine. The Nifty Smallcap250 index has given a breakout from 20-month consolidation. Pattern implication suggest another 20-25% rally over next 12–15 month period.

• Structurally, the formation of higher peak-trough on the monthly chart signifies elongation of rallies that makes us confident to revise support base at 18900, as it is confluence of:

• since March Nifty has not corrected more than 400 points. In current scenario 400 points correction will mature at 18945

• 61.8% retracement of current up move (18645-19345), at 18913

Nifty Bank: 45158

Technical Outlook

• The day’s price action formed a bull candle with bullish gap underneath indicating continuation of upward momentum after recent breakout and follow through buying above last week’s high

• Going ahead, we expect, index to maintain its upward trend and head towards 46300 in July as it s 138 . 2 % external retracement of Dec -Mar decline (44151 -38613 ) . The breakout from six months consolidation backed by faster pace of retracement helped index to record a fresh All Time High and signals structural improvement from medium term perspective

• From structural perspective, any temporary breather from hereon would provide fresh investment opportunity to ride the uptrend wherein we expect PSU banks to now start catchup and head towards their respective 52 -week highs

• The formation of higher peak and trough on the larger degree chart makes us confident to revise support base at 44000 as it is 61 . 8 % retracement of most recent upmove from lows of 43300

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