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Nifty

• In line with our view, Nifty resolved higher and surpassed an all-time high of 18600. The Nifty started the week on a positive note and inched northward as intraday dips were bought into. The daily price action formed a bull candle, indicating continuance of upward momentum

• The formation of higher peak and trough supported by southward drifting crude oil prices makes us reiterate our positive stance and expect Nifty to head towards 18900 in coming month. In the process, we expect midcaps to relatively outperform as it approaches maturity of price/time wise correction. Thus, temporary breather from here on should be capitalised on as incremental buying opportunity as we do not expect index to breach the key support of 18100. Our positive stance is anchored on following observations:

• a) Nifty continues to make higher high-low after breaking out from one year trading range

• b) Brent prices continue to trend lower in a well channelled fashion. Expect downtrend to further accelerate below 81 mark with strong resistance at 95

• c) Dollar index continued lower high-low pattern after breakdown from multi month rising channel indicating reversal which is positive for equities

• d) India VIX corrected another 10% in the week continuing its down trend highlighting low risk perception amongst market participants

• Structurally, breakout from higher base formation above 20 days EMA signifies elevated buying demand that makes us confident to revise support base at 18100 as it is confluence of:

• a) as per change of polarity concept earlier resistance of 18100 would now act as key support

• b) 20 days EMA is placed at 18143

• c) lower band of recent consolidation is placed at 18212

• Midcap and small cap indices have approached maturity of price/time maturity of correction after 12 weeks consolidation wherein it merely retraced 38%. Shallow retracement indicates inherent strength that augurs well for next leg of up move

• In the coming session, index is likely open on a flat note tracking recovery in Asian peers. We expect index to endure its upward momentum while maintaining higher high-low. Thus, intraday dip towards 18610-18641 should be used to create intraday long positions for target of 18729

Nifty Bank

• The Daily price action resulted in a small bullish belt hold line pattern with lower high as prices bounced after gap down opening however then traded in a narrow range without surpassing Friday’s high (43339 ) indicating breather after sharp up move measuring 14 % in past eight weeks led weekly stochastic at 93

• We reiterate our positive stance and expect the index to head towards 44600 levels gradually in the coming month 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 -42860 ) placed at 41780 (b) the 10 weeks EMA currently placed at 41230 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 subdued note tracking weak global cues . We expect the index to consolidate with positive bias after the recent sharp up move . Hence use intraday dips towards 43060 -43140 for creating long position for the target of 43390 , with a stoploss of 42940

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