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Technical Outlook

* The Nifty staged a strong comeback after initial gap down opening (18070-17771) as buying demand from 38.2% retracement of past two week’s rally (17166-18088) helped the index to recoup intraday losses. As a result, the daily price action formed a bull candle, indicating elevated buying demand

* Going ahead, we reiterate our positive view of the Nifty heading towards 18300 in coming weeks and eventually retesting lifetime highs of 18600 in a couple of months. Key point to highlight over the past two months is that secondary corrections have remained shallower and short lived as buying dips strategy has been faring well. Thus, we advise to utilise dips as incremental buying opportunity as key support is placed at 17500 levels

* The current up move is validated by improvement in broader structure as significant jump has been observed in Bullish Golden Crossover (50 days EMA crossing above 200 days EMA) in Nifty 500 universe as currently 53% of the stock have witnessed golden cross compared to early August 2022 reading of 38% post occurrence of Golden cross in Nifty. The Golden Cross represents a major shift in momentum from bears to bulls indicating rejuvenation of upward momentum in the broader market.

* We expect broader market to endure its catch up activity, as in relative terms, ratio chart of Nifty Midcap against the Nifty has surpassed November 2021 highs while Nifty Small cap ratio chart has given a breakout from falling channel and expected to catch up. Even the Relative ratio of Nifty 500 index against S&P 500 has given a breakout from a decade long consolidation, indicating outperformance of Indian equities against S&P 500 as domestic markets are already the best performers within EM pack. Similar breakout in 2003 was followed by multiyear outperformance of Indian equities.

* Structurally, formation of higher high-low on the larger degree chart makes us confident to revise support base at 17500 as it is 61.8% retracement of preceding 2 week rally (17166-18088)

* In the coming session, index is likely to open on a positive note tracking flat global cues. We expect index to maintain positive momentum and surpass recent swing high of 18088. Hence, use intraday dip towards 17976-18004 for creating long position for the target of 18090.

Nifty Bank

Technical Outlook

* The daily price action formed a strong bull candle as it opened lower, however buying demand at lower levels saw the index recouped its entire decline and closed firmly higher above 41000 levels signaling continuation of the up move .

* Going ahead we expect the index to maintain positive bias and challange the all -time high of 41800 levels in the coming sessions being the measuring implication of the last three weeks range breakout (39800 -37944 ) . Decline on account of volatile global cues should be used as a incremental buying opportunity

* Structurally the recent rally from June lows of 32290 is strongest in magnitude terms since October 2021 while declines are smaller and short lived indicating an improving price structure .

* Bank Nifty continue to relatively outperformed the benchmark index in the last few quarters as can be seen in the Bank Nifty/Nifty ratio chart . It has generated a breakout above last 15 months range . Within the banking stocks PSU banking stocks has been resilient and showing relative strength which we expect to continue with its outperformance going forward

* The index has support around 39500 levels as it is the confluence of the last week low and the 61 . 8 % retracement of the current up move (37944 -41626 ) In the coming session index is likely to open positive note amid flat global cues . We expect, Bank Nifty to endure its northbound journey and challenge all time high in coming sessions . Hence use intraday decline towards 41320 -41390 for creating long position for the target of 41655 , maintain a stoploss at 41198

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