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Nifty

Technical Outlook

* The Nifty started the week on a subdued note. However, buying demand from 100 day’s EMA helped the index to recover 230 points from days low and end the session above 17300. The daily price action formed a sizable bull candle, highlighting elevated buying demand amid progression of Q2FY23 result season

* We expect the index to maintain its positive momentum and gradually resolve above the upper band of consolidation placed at 17500 levels. Eventually, we expect the index to accelerate upward momentum towards psychological mark of 18000 in coming weeks. However, such a move would be in a non-linear fashion amid global volatility. Thus, any cool off from here on should be capitalised on to accumulate quality stocks as buying on dips strategy has been faring well over past couple of weeks. Over past three weeks, on numerous occasions the index saw buying demand in the vicinity of 200 days EMA at 16900, thereby rewarding buying on dips strategy amid global volatility. Our positive view on the market is further validated by following observations: a) historically, over past two decades, Q4 returns for Nifty has been positive (average 11% and minimum 5%) on 15 out of 21 occasions (70%). The history favours buying dips from here on, b) US dollar/INR pair has approached key trend line resistance around 83.30 mark. Since 2015, on multiple occasions the pair has reversed lower from this trend line amid extreme overbought readings on weekly timeframe. Stability in rupee against US dollar would support Indian equities in coming weeks

* Structurally, despite elevated volatility index managed to hold the psychological mark of 17000, indicating elevated support base. Thereby, we revise our support to 17100-17000 zone it is confluence of: A) 100 days EMA is placed at 17095 B) current week’s low is placed at 17098

* Broader market indices have been forming a higher base above 100 days EMA. We expect the Nifty midcap and small cap indices to hold their September lows and stage a pullback in coming weeks amid commencement of earning season

* In the coming session, index is likely to witness gap up opening tracking buoyant global cues. We expect index to trade with appositive bias while forming higher high-low formation. Hence, use dips to create intraday long positions in the range 17380-17410 for target of 17497

Bank Nifty

Technical Outlook

* The daily price action formed a bull candle with a higher high and a firm close above last two weeks almost identical highs ( 39608 ) signaling strength and continuation of the up move .

* Going forward, we expect index to maintain positive bias and head towards 40800 levels in coming week being the measuring implication of the last six sessions consolidation range and the 80 % retracement of the recent breather (41840 -37386 ) . Dips on account of global volatility should be used as a buying opportunity

* Structurally, on the longer time frame the index has already posted faster retracement on higher degree as eight month’s decline (41829 -32990 ) was completely retraced in just two and half months highlighting end of major corrective phase and structural improvement . Hence ongoing retracement of June -September rally should not be construed negative rather would make overall trend healthier • Amongst momentum oscillators, weekly stochastics has generated a buy signal near the neutral reading of 40 thus supports the positive bias in the index

* The Bank Nifty has key immediate support at 38500 mark being the confluence of the last week low and the 50 % retracement of the current up move (37387 -39974 )

* In the coming session, index is likely to open on a positive note amid strong global cues . We expect the index to trade with positive bias while maintaining higher high -low . Hence after a positive opening use intraday dips towards 40100 -40170 for creating long position for the target of 40430 with a stoploss at 39970

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