IGI Logo

Nifty: 17915

Technical Outlook

• The index started the monthly expiry session on a positive note and gradually inched upward as the day progressed. The daily price action formed a bull candle carrying higher high-low, indicating acceleration of upward momentum on the breach of upper band of consolidation placed at 17800. As a result, index has been sustaining above 17800 mark over past two sessions, highlighting revival in upward momentum

• Going ahead, we expect index to resolve higher and gradually head towards 18100 in coming weeks. In the process, bouts of volatility ahead of upcoming Fed event can not be ruled out. Thus, any dip from hereon should not be construed as negative, instead dips should be capitalised to accumulate quality stocks.

• Our positive view is further validated by following observations:

a) The index has formed a higher base after retesting falling channel breakout coincided with 200 days EMA, indicating inherent strength

b) The percentage of stocks above 200 days EMA for the Nifty 500 universe have jumped to 47% compared to march end reading of 30%, indicating improvement in broader market participation

c) FII inflows have been supportive with the US dollar in declining trend. In April, FII’s turned net buyers, one of highest among EM basket

• We expect broader markets to witness catch up activity in gradual manner as Nifty midcap and small cap indices have resolved out of four month falling channel indicating resumption of primary uptrend

• Structurally, the slower pace of retracement makes us confident to maintain support base at 17500 as it is 38.2% retracement of three-week rally (16828-17863) coincided with rising 200-day ema (17530)

In the coming session, index is likely to open on a positive note tracking buoyant global cues. We expect, index to endure its northbound journey while maintaining higher high-low formation. Hence, use intraday pullback in April future towards 17980-18012 to create intraday long positions for target of 18096 with a stoploss of 17944

Nifty Bank: 43000

Technical Outlook

* The daily price action formed a bull candle with a higher high - low signalling continuation of the up trend as the index on expected lines tested the immediate target area of 43000 on Thursday session .

* Going ahead, index sustaining above the resistance area of 43000 -43200 will signal gradual extension of the up move towards the all time high of 44150 levels in the coming weeks . However, we expect the up move to be in non -linear manner with bouts of volatility cannot be ruled out . Dips should be used as buying opportunity

* The index has seen a strong up move of 3700 points in the last four weeks which has lead to weekly stochastic approaching overbought territory with a reading of 94 . Hence, a breather at higher levels can not be ruled out which should not be seen as negative instead it will make the overall trend healthy . However, for any pause in the upward momentum the index need to start forming lower high -low in daily chart

* Key point to highlight is that the index has recently for the first time since December 2022 has posted faster retracement of last major declining segment i . e . seven weeks decline (42015 -38613 ) retraced in just three weeks signalling positive price structure

* Bank Nifty continues to outperform the Nifty . The Bank Nifty/Nifty ratio line continues to trend higher and sustaining above the major breakout area signalling extended period of outperformance

* The index has support at 41200 levels being the confluence of the 38 . 2 % retracement of the current up move (38613 -43043 ) and rising 20 weeks EMA currently placed at 41206 levels

In the coming session, the index is likely to open on a positive note tracking firm global cues . We expect Index to trade with positive bias while maintaining higher high -low . Hence use intraday dips towards 43045 -43120 for creating long position for the target 43365 , maintain a stoploss of 42915

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