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Nifty : 19332

Technical Outlook

• The Nifty oscillated in 100 points range after initial up move. As a result, daily price action formed a bull candle with lower shadow, highlighting that intraday dips are bought into. The Nifty midcap, small cap outshone by gaining 0.7% and 0.8%, respectively

• The sequence of higher high-low formation signifies elevated buying demand that makes us confident to reiterate our positive stance and expect Nifty to gradually head towards psychological mark of 20000 in coming weeks. In the process, bouts of volatility can not be ruled out tracking global development and overbought domestic conditions. Thus, buy on dips would be the prudent strategy to adopt as we do not expect index to breach key support threshold of 19300.

• The Nifty midcap index scaled to fresh lifetime high while small cap index is still 5% away from its all time high. Going ahead, we expect broader market to continue with its relative outperformance wherein small cap index would accelerate its relative outperformance. Further, the persistent improvement in market breadth signifies inherent strength that augurs well for durability of ongoing up move.

• Structurally, since March buy on dips strategy has continued to fare well as Nifty has not corrected more than 400 points while sustaining above 20 days EMA. Thus, any decline from hereon should not be construed as negative instead capiatliase it as an incremental buying opportunity as we do not expect index to breach the key support threshold of 19300, being confluence of:

• A) 38.2% retracement of current up move (18645-19819), at 19371 • B) 20 days EMA is placed at 19272 • C) Since March index has not closed below previous weeks low. Last week’s low is placed at 19327

Nifty Bank: 44925

• The Daily price action formed inside bar as price action remained contained within Tuesday’s range (45905 - 45281 ) index approached higher band of channel around 46000 mark and almost achieved our short term target

• We expect index to gradually head towards 46300 in July as it s 138 . 2 % external retracement of Dec -Mar decline (44151 -38613 )

• Structurally, PSU banks are expected to relatively outperform as PSU banking index is poised for multi year breakout indicating structural turnaround . Correction in PSU stocks remains a buying opportunity

• Key short term support is placed at 44500 being last week low that coincides with rising 20 -day EMA

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