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Nifty : 17557

Technical Outlook

• On expected lines, index resolved higher and closed above the 200 days EMA as intraday pullbacks were bought into throughout the session. The daily price action formed a strong bull candle carrying higher high-low, indicating continuance of positive bias.

• Going ahead, we reiterate our positive stance and expect Nifty to head towards 17600 as it is the upper band of the falling channel coincided with the implicated target of recent consolidation breakout (17200-16800). Key point to highlight is that, we are witnessing significant improvement in our broader indicators which augurs well for acceleration of upward momentum. Thus, any dips from hereon should be capitalized to accumulate quality stocks. The key broader indicators are as follows:

• A) The index has retraced past 12 sessions decline (17530-16828) in just four sessions. Faster pace of retracement signifies structural improvement

• B) On the momentum indicator front, Rate of Change indicator has logged a resolute breakout from 5 month high (on multiple parameters 5 and 10), indicating revival in upward momentum. Meanwhile, on expected lines, monthly stochastic oscillator bounced from multi month low of 25 that led to a technical pullback

• C) Past four session’s up move was backed by robust market breadth as 80% components of Nifty 500 universe has given positive returns, highlighting inherent strength that in turns suggests broader market participation

• D) India VIX is sustaining below 14 levels indicating further cool off, which is positive for equities

• E) US dollar index trending down currently below 102 which is key global positive for EM equities.

• Broader markets extended pullback after taking support from lower band of three months falling channel. Both, Nifty midcap and small cap indices have surpassed above their past two weeks high, indicating pause in downward momentum and augurs well acceleration of upward momentum in coming weeks

• Structurally, the formation of higher high-low on the weekly chart makes us confident to revise support base at psychological mark of 17000 as it is 80% retracement of recent pullback (16828-17570)

• In the coming session, index is likely to open on a subdued note tracking muted global cues. We expect, stock specific action to prevail amid positive bias. Meanwhile volatility would remain elevated ahead of RBI policy and weekly expiry. Hence, use intraday dip towards 17510-17542 to create intraday long positions for target of 17627 with a stoploss of 17473

Nifty Bank: 40999

Technical Outlook

• The daily price action formed a high wave candle with a higher high -low signalling continuation of the up move for the fifth consecutive session . The index started the session on a positive note and thereafter consolidated in a range to close the session higher by 0 . 5 % ahead of the RBI monetary policy outcome on Thursday

• Going ahead, we expect the index to maintain positive bias and head towards 41300 levels in the coming sessions being the 80 % retracement of the February -March 2023 breather (42015 -38613 ) . However, the index has witnessed a strong up move of 1700 points in just five sessions which has led to daily stochastic at an overbought territory with a reading of 96 , hence a couple of days of breather after recent strong up move can not be ruled out . Index has key support is placed at 40000 levels, dips should be used as a buying opportunity

• Bank Nifty/Nifty ratio line continues to trend higher and sustain the above major breakout area signalling continuation of the outperformance

• The index has support at 40000 levels being the confluence the bullish gap up area of last Friday and the 50 % retracement of the last two weeks pullback (38613 -41071 )

• The weekly stochastic has generated a buy signal moving above its three periods average thus supports the continuation of the current pullback in the coming weeks

• In the coming session, the index is likely to open on a flat to negative note amid soft global cues . Index is expected to consolidate its recent gains amid high volatility on account of weekly expiry and RBI monetary policy outcome . Hence use intraday dips towards 40840 -40920 for creating long position for the target 41170 , maintain a stoploss of 40730

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