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Nifty

• The Nifty started the session on a subdued note and subsequently traded in a merely 90-point range. As a result, daily price action formed an inside bar confined within Wednesday's trading range 18668-18528, indicating an extended breather amid stock specific action

• The index is undergoing a slower pace of retracement wherein over past five sessions it retraced less than 50% of preceding eight session’s up move 18133-18887, indicating inherent strength. The ongoing breather helped the index to cool off overbought conditions (daily stochastic slipped below 20) and form a higher base that would gradually pave the way to challenge 18900 mark. Eventually, we expect the Nifty to head towards 19400 in coming month. In the process, broader markets would continue with their relative outperformance. However, the move towards 19400 would be in a non-linear manner as bouts of volatility amid global development cannot be ruled out. Thus, extended breather from here on should be capitalised on as incremental buying opportunity as strong support is placed at 18300. The aforementioned positive stance is further validated by following observations:

• a) breakout from 13 month’s consolidation signifies resumption of structural up trend

• b) Dow Jones Industrial retraced the last falling segment’s high faster as nine week’s decline was retraced in six weeks for the first time since January 2022 highs

• c) Dollar Index and US 10-year yields continued to form lower high-lows after breaking from rising channels indicating further downsides. Both have inverse correlation with equities

• Nifty midcap index is sustaining above the triangle breakout area, indicating rejuvenation of upward momentum. We expect it to resolve higher and challenge all-time high with small cap accelerating catch up activity in coming weeks

• Structurally, elongation of rallies along with shallow retracement indicates inherent strength that makes us confident to retain support base upward at 18300 as it is confluence of: a) 80% retracement of late November rally 18133-18887 is placed at 18284 b) as per change of polarity concept January high of 18350 would now act as key support c) last week's low is placed at 18365

• In the coming session, index is likely open on a positive note tracking firm global cues. We expect index to hold past two sessions low around 18650 and trade with a positive bias. Thus, intraday dip towards 18700- 18732 should be used to create intraday long positions for target of 18817

Nifty Bank

• The daily price action formed a bull candle with a higher high - low as the index scaled a fresh all time high (43640 ) signalling continuation of the positive momentum after breather of the last one week

• We expect the index to maintain positive bias and head gradually towards 44600 levels in the coming weeks being the 161 . 8 % external retracement of the September 2022 breather (41840 -37387 ) . Dips should be used as a buying opportunity index has strong support placed around 41800 levels

• Going forward, a temporary breather cannot be ruled out as the weekly stochastic after the recent sharp rally is placed at an overbought territory with a reading of 90 . However, it will be confirmed only on formation of a lower high -low sequence . We believe corrective decline should not be seen as negative instead breather towards the breakout area of 41800 levels should be used as a buying opportunity for next leg of up move

• Structurally, in the Bank Nifty rallies are getting faster and stronger while corrections are shallow, underpinning inherent strength highlighting robust price structure

• The Bank Nifty has support at 41800 mark being the confluence of the (a) 23 . 6 % retracement of the last nine weeks up move (37387 -43640 ) placed at 41970 (b) the 10 weeks EMA currently placed at 41840 levels (c) the upper band of the recent eight weeks range breakout area placed around 41800 levels

• In the coming session index is likely to open on a positive note tracking firm global cues . We expect the index to continue with its positive momentum while maintaining higher high -low . Hence use intraday dips towards 43530 -43610 for creating long position for the target of 43870 , with a stoploss of 43410

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