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Nifty: 17649

• The index started the week on a positive note and witnessed a roller coaster move wherein the Nifty oscillated by >830 points. The daily price action resembles a piercing line bull candle, Indicating pause in downward momentum as supportive efforts emerged in the vicinity of 200 days EMA placed at 17550

• Going ahead, we expect volatility to remain high ahead of key event of the Union Budget coupled with US Fed meet wherein strong support is placed in the range of 17500-17300, as it is confluence of key long term moving averages like 200 days EMA and 52 weeks EMA. Meanwhile, stochastic oscillator is poised at oversold territory, indicating possibility of pullback can not be ruled out. Thus, extended correction from hereon should be capitalised on to accumulate quality stocks in a staggered manner. In the process, 18300 would act as immediate resistance on the upside. Following are the points which validate our stance of pullback: a) the Nifty is approaching its price and time wise maturity as it is entering ninth week of correction against nine week’s rally (16748-18887) seen during September 2020 to January 2021 wherein it retraced 61.8%, highlighting robust price structure b) US Dollar index maintained lower high-low on the weekly chart and sustaining below 102, indicating continuance of corrective bias. Indian equities have an inverse correlation with the US dollar index. Thus, weak dollar leads to higher foreign inflows, c) globally, major equity markets have remained resilient and concluded the week on a positive note. We expect domestic markets to perform in tandem with global peers

• Structurally, the index has been undergoing slower pace of retracement, indicating robust price structure. We believe, ongoing corrective move would get anchored around strong support zone of 17500—17300, as it is confluence of: a) 80% retracement of October-December rally 16748- 18887 b) Price parity of December decline (18887-17774) projected from last week’s high of 18201 is placed at 17140 c) Key long term moving average like 200 EMA & 52 weeks EMA is placed at 17500 and 17360, respectively

• In tandem with the benchmark, broader markets have undergone extended correction. We believe, ongoing correction would help to cool off overbought conditions and form a higher base that would pave the way for the next leg of the up move

• In the coming session, index is likely to open on a positive note tracking mixed global cues. We expect, Nifty to stage a pullback amid oversold conditions, wherein intraday support is placed at 17600. Thus, intraday dip towards 17704-17732 should be used to create intraday long positions for target of 17819

Nifty Weekly Candlestick Chart

Nifty Bank: 40387

Technical Outlook

• The index started the session on weak note and initial recovery remained short lived as index extended losses towards 39500 mid -session . However sharp recovery in last one hour led index to recovery fully as buying demand emerged in the vicinity of 200 -day ema (39795 )

• Going ahead in the coming week volatility is likely to remain high ahead of the Union Budget coupled with US Fed meet outcome wherein strong support is placed at 39500 -39700 levels which we expect to hold . Thus, we believe corrective decline from here on should be used as buying opportunity in quality banking stocks

• Key point to highlight is that the ongoing secondary correction (11%) of the last seven weeks has hauled weekly stochastic oscillator near oversold territory with a reading of 23 . Structurally, over past seven weeks, the index has undergone shallow retracement of 61 % of its preceding 10 weeks rally of October –December (37387 -44151 ) indicating inherent strength

• The Bank Nifty has key support at 39500 -39700 marks as it is the confluence of the following technical observations : (a) 61 . 8 % retracement of the previous major rally (37387 -44151 ) at 39970 (b) the presence of long term 200 days EMA is also placed at 39795 (c) Price parity with the previous major decline of September 2022 (41840 -37387 ) as projected from the December 2022 all time high of 44151 also signals support at 39500 levels

• The weekly stochastic remain in downtrend, however approaching oversold territory with a reading of 23 signalling supportive effort likely in coming weeks

In the coming session, the index is likely to open on a positive note amid mixed global cues . We expect the index to consolidate with a positive bias . Hence use intraday dips towards 40602 -40682 for creating long position for a target of 40938 , with a stop loss of 40489

Nifty Bank Index – Weekly Candlestick Chart

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