IGI Logo

Nifty

• The Nifty recouped initial losses and ended the session on a flat note as supportive efforts emerged from October 2021 high of 18600 (as per change of polarity concept earlier resistance acted as support). As a result, daily price action resembles a hammer like candle, indicating elevated buying demand

• Going ahead, we maintain our positive stance and expect the Nifty to gradually head towards 19400 in coming weeks. However, the move towards 19400 would be in a non linear manner as bouts of volatility amid global development cannot be ruled out wherein we expect broader markets to relatively outperform as it is resolving out of three months buying opportunity and a higher base formation. Thus, dips should be capitalised on as incremental buying opportunity. We expect any temporary breather to get anchored around key support of 18300. The aforementioned positive stance is further validated by following observations:

• a) breakout from 13 month’s consolidation signifies resumption of structural up trend

• b) market breadth measured in terms of percentage of stocks above 200 DMA surpassed 66% for the first time in 11 months indicating broader participation

• c) Dow Jones Industrial retraced last falling segment’s high faster as nine week’s decline was retraced in six weeks for the first time since January 2022 highs

• d) Dollar Index and US 10 year yields continue to form lower highlows after breaking from rising channels indicating further downsides. Both have inverse correlation with equities

• The Nifty midcap index endured its upward momentum and closed at 12 months high. We expect, it to resolve higher and challenge all time high while small cap to accelerate catch up activity in coming weeks.

• Structurally, elongation of rallies along with shallow retracement indicates inherent strength that 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) last week's low is placed at 18365

• In the coming session, index is likely open on a negative note tracking subdued global cues. Post initial decline we expect supportive efforts to emerge from lower levels. Thus, intraday dip towards 18680-18712 should be used to create intraday long positions for target of 18797

Nifty Bank

• The daily price action formed a high wave candle with shadows in either direction signalling continuation of the consolidation after sharp up move measuring 15 % in past nine weeks • 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 ) . Dips should be used as a buying opportunity index has strong support placed around 41800 levels

• Going forward, a temporary breather cannot be ruled out as the weekly stochastic after the recent sharp rally is placed at an overbought territory with a reading of 91 . However, it will be confirmed only on formation of a lower high -low sequence . We believe corrective decline should not be seen as negative instead breather towards the breakout area of 41800 levels should be used as a buying opportunity for next leg of up move

• 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 nine weeks up move (37387 -43515 ) placed at 41970 (b) the 10 weeks EMA currently placed at 41470 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 negative note tracking soft global cues . We expect the index to continue its consolidation with positive bias after the recent sharp up move amid stock specific action . Hence use intraday dips towards 43170 -43250 for creating long position for the target of 43490 , with a stoploss of 43060

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631

Above views are of the author and not of the website kindly read disclaimer