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Nifty : 17754

Technical Outlook

• The index started the Wednesday’s session with a negative gap (17711-17666) amid weak global cues tracking hawkish comment by U.S. Federal Reserve Chair Jerome Powell. However, buying demand in the vicinity of 200 days EMA helped index to recoup intraday losses and settle the session on a positive note. The daily price action formed a bull candle with small lower shadow, highlighting continuance of positive bias.

• Going ahead, we expect index to endure its northbound journey and challenge the immediate hurdle of 17800 mark and head towards next milestone of 18050 in coming sessions. Structurally, we reiterate our positive stance and expect Nifty to head towards 18300 in March as it is 61.8% retracement of past three months decline (18887-17255). Thus, any dips from hereon should not be construed as negative instead dips should be capitalized to accumulate quality stocks. Our structural positive stance is further validated by following observations:

• A) Historically, over past two decades, on all ten occasions when Nifty corrected for three consecutive months, in subsequent month, index gained average 6% from lows. Odds favour market to follow this rhythm and eventually head towards 18300 in March

• B) Indian benchmarks are undergoing higher base formation over past three months after reversing CY22 decline of 18%. Within a structural bull market, secondary correction is a part of the secular bull market. Current scenario is very similar to that of CY13, CY16 and CY18. In each of these identical instances, higher base formation consumed around three to four months and retraced preceding up move by around 50-60%, followed by new highs over next quarter

• C) Despite host of negative news, India VIX (that gauge the market sentiments) has corrected 11% in the month of March, highlighting low risk perception among market participants.

• D) Rupee has seen sharp appreciation last week as DOLLAR/RUPEE pair has reacted from key hurdle of 83 and eventually breached five weeks channel, signalling pause in upward momentum for dollar and further appreciation for Rupee in coming weeks

• At present, index has bounced after retracing 44% of prior up (15183- 18887) move seen over three month period and approaching price/time wise maturity of correction. Thus, we expect index to hold the key support of 17200 in coming weeks as it is confluence of: a) 80% retracement of past September-December 2022 rally 16748- 18887, placed at 17175 b) price parity of December decline 18887- 17774 projected from end of January high of 18201, is placed at 17132

• In the coming session, index is likely to open on flat note amid mixed global cues. We expect the index to trade with positive bias amid elevated volatility owing to weekly expiry. Hence, use intraday dips towards 17710-17742 to create intraday long positions for target of 17828 with a stoploss of 17673

Nifty Bank: 41577

Technical Outlook

• The daily price action formed a bull candle as buying demand emerged taking support near the 20 days EMA (currently placed at 41000 levels) . The index recovered as the session progressed and closed higher by 0 . 6 % .

• Going ahead, we expect the index to maintain positive bias and head towards 42000 levels in the coming week being the upper band of the last four weeks range . Follow through strength above upper band of the range will open upside towards 43200 levels in the coming month being the 80 % retracement of the last three months breather (44151 -39419 )

• Structurally, since CY20 (Covid lows) intermediate corrections have lasted for 9 -11 weeks in a row . In the current scenario as well, index is seen maintaining the rhythm and resuming up move after 11 weeks of corrective decline . The index in the last 11 weeks has retraced just 65 % of its preceding 10 weeks rally of October –December (37387 - 44151 ) . A shallow retracement signals a base formation and a positive price structure

• The weekly stochastic is seen consolidating above the neutral reading of 40 signaling continuation of positive bias in the coming weeks

• The index has key support around 39400 -39700 levels being the confluence of (a) the lower band of the last one month’s consolidation range placed around 39500 levels (b) the presence of long term 52 weeks EMA is also placed at 39430 levels In the coming session, the index is likely to open on a flat note amid mixed global cues .

Index is expected to trade with positive bias while maintaining higher high -low . Hence use intraday dips towards 41510 -41580 for creating long position for the target 41830 , maintain a stoploss of 41390

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