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Nifty: 18726

Technical Outlook

• The Nifty started the session on a positive note tracking firm global cues and gradually inched upward as the day progressed. As a result, daily price action formed a bull candle carrying higher highlow, indicating acceleration of upward momentum as index resolved out of six session’s consolidation (18662-18465). In the process, Nifty midcap, small cap outperformed by gaining 1% and 1.35%, respectively

• The acceleration of upward momentum backed by improving market breadth makes us reiterate our positive stance and expect Nifty to gradually retest the life time highs of 18887 in the coming weeks. Key point to highlight is that, since March Nifty has not corrected for more than 400 points while sustaining above its 20 days EMA. Thus, buy on dips would remain as prudent strategy to adopted to build portfolio of quality stocks from medium term perspective

• We expect the broader market to endure with its relative outperformance as the midcap index recorded breakout from 18 months consolidation while small cap index has come out of one year consolidation, highlighting structural turnaround. Further, 5- year consolidation breakout on Nifty Midcap 100 ratio line against Nifty 500, signifies acceleration in upward momentum of midcaps. Similar breakout in CY14 was followed by 25% rally in Nifty Midcap 100 over next 12 months

• Structurally, formation of higher high-low on the monthly chart signifies elevated buying demand that makes us confident to revise support base at 18200 as it is 80% retracement of current up move (18060-18662) coincided with past two week’s low of 18178

• The Nifty midcap index has been hovering at new all time high while Nifty small cap index still 14% away from its fall time high while 71% components of small cap index is trading above its 200 days EMA which was witnessed during record high seen during Jan 2022, indicating revival in the broader market. Thus, we expect acceleration in catch up activity of small cap space against benchmark

• In the coming session, the index is likely to open on a flat to positive note amid muted global cues. We expect, index to trade with a positive bias while maintaining higher high-low formation. Hence, use intraday dip in June future towards 18718-18752 to create intraday long positions for target of 18836 with a stoploss of 18683.

Nifty Bank: 44275

Technical Outlook

• The daily price action formed a high wave candle with a higher high -low signalling continuation of the consolidation with positive bias around the 44000 levels . The index is seen consolidating for the fourth consecutive week after the recent strong up move of 15 % points in the preceding two months .

• Going ahead, we expect the index to maintain positive bias and gradually head towards 44900 levels in the coming weeks being the measuring implication of the recent range breakout (44150 -43400 ) amid stock specific action

• The up move towards 44900 levels would be in a non -linear manner as bouts of volatility after last two months strong up move cannot be ruled out, dips should be used as a buying opportunity

• Bank Nifty in the weekly time frame has witnessed a faster retracement of the 14 weeks decline (44151 -38613 ) during Dec22 -Mar23 in just seven weeks . Faster retracement in just half the time interval indicating structural improvement from medium term perspective

• On relative terms, Bank Nifty continues to outperform the Nifty . The Bank Nifty/Nifty ratio line continues to trend higher and maintain higher high -low signalling extended period of outperformance

• The index has immediate support at 43400 levels being the confluence of the last two weeks identical lows and the 50 % retracement of the recent up move (42582 -44151 )

• Among the oscillators, the weekly 14 periods RSI remain in uptrend thus supports the overall positive bias in the index

• In the coming session, the index is likely to open on a flat note amid muted global cues . We expect index to extend its consolidation with positive bias amid stock specific action ahead of the RBI monetary policy outcome . Hence, create long position in dips towards 44180 -44260 for the target of 44498 , maintain stoploss at 44060

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