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Nifty: 18594

Technical Outlook

• The Nifty started the week with a bullish gap (18534-18612) and subsequently consolidated in 60 points range. As a result, daily price action formed a small bear candle carrying gap below it, indicating continuation of upward momentum amid stock specific action • Going ahead, we reiterate our constructive stance and expect Nifty to gradually retest the life time highs of 18887 in next few 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, any dip from hereon should not be construed as negative instead dips should be capitalized to build portfolio of quality stocks with strong earning from medium term perspective

• The broader market continued with its record setting spree over seventh consecutive session, highlighting inherent strength. We expect broader market to relatively outperform the benchmark and expect midcap index to rally ~25% in next three to four quarters based on following observations:

• a) The broader market has been relatively outperforming the benchmark as midcap index recorded breakout from 18 months consolidation while small cap index has come out of one year consolidation, highlighting structural turnaround.

• b) five-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 clocking fresh all time high while Nifty small cap index still 14% away from its fall time high while 70% 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 soft note tracking muted global cues. We expect, index to consolidate amid positive bias. Hence, use intraday dip in June future towards 18640-18673 to create intraday long positions for target of 18757 with a stoploss of 18603.

Nifty Bank: 44101

Technical Outlook

• The daily price action formed a Doji candle with a higher high - low signalling consolidation with positive bias around the 44000 levels for the third consecutive week after the recent strong up move of 15 % points in the last 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). We believe stock specific action will be in focus with PSU banking stocks outperforming

• 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 mixed global cues . We expect index to trade with positive bias amid stock specific action ahead of the RBI monetary policy outcome . Hence, create long position in dips towards 44120 - 44200 for the target of 44430 , maintain stoploss at 43990

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