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Nifty: 18118

Technical Outlook

• The index started the week on a positive note and subsequently oscillated in a 100 point range amid positive bias. The daily price action formed a high wave candle carrying a higher high-low formation, indicating continuance of positive momentum amid elevated volatility ahead of upcoming monthly expiry and Union Budget

• Key point to highlight is that, the index has witnessed a decisive close above the 20 day’s EMA in Monday’s session, which had been acting as a stiff resistance over the past five weeks, indicating a revival of upward momentum that makes us believe the index would resolve higher and gradually head towards 18500 in coming weeks as it is 61.8% retracement of December decline (18887-17774). In the process, we do not expect the index to breach the key support of 17800 amid global volatility. Thus, any cool off from hereon should be used as incremental buying opportunity. Our constructive stance is based on following observations:

• a) Dollar index extended decline below 102 and remains in strong downtrend. Historically, a weak dollar leads to higher foreign inflows and positive for Indian equities structurally

• b) India VIX dipped 5% and ended the week below 15 levels for a fourth week indicating low risk perception by market participants

• Structurally, the index has been undergoing slower pace of retracement over past seven weeks wherein its retraced 50% of preceding nine week’s rally (16748-18888), indicating inherent strength. The formation of higher high-low signifies buying demand at elevated support base at 17800 as it is confluence of: a) 50% retracement of October-December rally 16748-18887 is at 17565, b) December 2022 low is placed at 17800 c) 100 days EMA is at 17898

• On the broader market front, indices are undergoing shallow retracement wherein over past three weeks it retraced merely 38.2% of a single week up move seen during the fag end of December 2022. We believe, ongoing healthy consolidation would help Nifty midcap, small cap indices to form a higher base to ride the next leg of the up move

• In the coming session, index is likely to open on a positive note tracking buoyant global cues. We expect, index to endure its upward momentum while maintaining higher high-low formation. Thus, intraday dip towards 18130-18162 should be used to create intraday long positions for target of 18249

Nifty Daily Chart

Nifty Bank: 42821

Technical OutlooK

• The daily price action formed a high wave candle with a higher high -low . The index started the session on a positive note and tested 43000 levels in the morning trade, however profit booking at higher levels saw the index gave up some its gains and closed the session higher by 0 . 7 %

• The Bank Nifty on yesterday session closed above its last two weeks high (42716 ) signalling strength . Index sustaining above the same will open upside towards the upper band of the last five weeks range placed at 43600 levels in the coming weeks which also confluence with the 80 % retracement of the recent breather (44151 -41597 )

• The index has formed a strong base around the key support area of 41600 -41800 over past five weeks . Key point to highlight is that the ongoing consolidation has hauled weekly stochastic oscillator in neutral territory and helped the index to form a higher base

• Structurally, over past six weeks, the index has undergone shallow retracement of just 38 . 2 % of its preceding 10 weeks rally of October –December (37387 -44151 ) indicating inherent strength

• The Bank Nifty has key support at 41600 marks as it is the confluence of (a) 38 . 2 % retracement of the previous rally (37387 -44151 ) at 41567 (b) higher band of the major one -year consolidation breakout area is also placed at 41600 -41800 range

• The weekly stochastic has generated a buy signal moving above its three periods average thus supports positive bias in the index in the coming sessions In the coming session, the index is likely to open on a positive note amid firm global cues . We expect the index to maintain positive bias while forming higher high -low . Hence after a positive opening use intraday dips towards 42780 -42860 for creating long position for a target of 43090 , with a stop loss of 42670 .

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