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Nifty

Technical Outlook

• The Nifty started Tuesday’s session with a positive gap (17312-17434) and sustained above the same throughout the session as intraday dips were bought into. Consequently, the index approached the upper band of consolidation of 17500 on expected lines. The daily price action formed a bull candle carrying a higher high-low, indicating continuance of upward momentum

• The formation of higher high and low supported by across sector participation makes us confident to believe the index would extend ongoing up move towards psychological mark of 18000 in coming weeks. However, such a move would be in a non-linear fashion amid global volatility. Thus, any cool off from here on should not be construed as negative. Instead, dips should be used as buying opportunity amid progression of Q2FY23 earning season. Our positive view on the market is further validated by following observations:

• a) historically, over the past two decades, Q4 returns for Nifty has been positive (average 11% and minimum 5%) on 15 out of 21 occasions (70%). The history favours buying dips from here on

• b) US dollar/INR pair has approached key trend line resistance around 83.30 mark. Since 2015, on multiple occasions, the pair has reversed lower from this trend line amid extreme overbought readings on weekly timeframe. Stability in the rupee against US dollar would support Indian equities in coming weeks

• Structurally, despite rise in volatility index managed to hold the psychological mark of 17000, indicating inherent strength amid elevated support base. Thereby, we revise our support to 17100-17000 zone it is confluence of: A) 100 days EMA is placed at 17103 B) current week’s low is placed at 17098

• Broader market indices have been forming a higher base above 100 days EMA. We expect the Nifty midcap and small cap indices to hold their September lows and stage a pullback in coming weeks amid commencement of earning season • In the coming session, index is likely to open on a positive note tracking frim global cues. We expect index to trade with a positive bias while maintaining higher high-low formation. Hence, use dips to create intraday long positions in the range 17440-17472 for target of 17557

Bank Nifty

Technical Outlook

• The daily price action formed a high wave candle with a higher high -low . The index on Tuesday session opened gap up thereafter traded in a range with positive bias amid stock specific activity signaling continuation of the positive momentum

• Going forward, we expect the index to maintain positive bias and head towards 40800 levels in coming sessions being the measuring implication of the recent six sessions consolidation range breakout area and the 80 % retracement of the recent breather (41840 -37386 ) . Dips if any on account of global volatility should be used as a buying opportunity

• Structurally, on the longer time frame the index has already posted faster retracement on higher degree as eight month’s decline (41829 -32990 ) was completely retraced in just two and half months highlighting end of major corrective phase and structural improvement . Hence ongoing retracement of June -September rally should not be construed negative rather would make overall trend healthier

• Amongst momentum oscillators, weekly stochastics has generated a buy signal near the neutral reading of 40 thus supports the positive bias in the index

• The Bank Nifty has key immediate support at 38500 mark being the confluence of the last week low and the 61 . 8 % retracement of the current up move (37387 -40435 )

• In the coming session, index is likely to open on a flat to positive note amid strong global cues . We expect the index to trade with positive bias while maintaining higher high -low . Hence after a positive opening use intraday dips towards 40180 -40240 for creating long position for the target of 40490 with a stoploss at 40060

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