IGI Logo

Nifty : 19389

Technical Outlook

• The index filled the morning gap (19322-19406) and gradually inched upward as the day progressed. In the process, Nifty clocked a fresh all time high of 19434. The Daily price action formed a small bear candle with long lower shadow, highlighting elevated buying demand

• The formation of higher peak and trough supported by improving market breadth signifies elevated buying demand that makes us confident to revise target upward at 19700 for coming weeks as it is 138.2% external retracement of Dec-Mar decline 18887-16828. Key point to highlight is that past six sessions 780 points rally hauled daily stochastic oscillator in overbought territory (placed at 96), indicating possibility of temporary breather can not be ruled out. Thus, dips should be capiatliased as incremental buying opportunity. Our constructive stance is further validated by following observations:

• A) Bank Nifty recorded breakout from six months consolidation (44500-38600) which would provide impetus for next leg of rally in Nifty (as Bank Nifty carries 38% weightage in Nifty)

• B) Nifty 500 has clocked a fresh all time high backed by sturdy market breadth as currently 75% stocks are trading above 200 DMA compared to previous record high (Dec-22) reading of 68, highlighting improving market breadth

• C) The persistent FII’s inflow bodes well for durability of current up move

• E) Structural improvement in global market as S&P 500 broken out of 13 months base formation • We expect broader market to continue with its relative outperformance against benchmark. Key point to highlight is that, the current up move in the broader market is backed by significant improvement in market which augurs well for durability of ongoing up move • Structurally, the formation of higher peak-trough on the monthly chart signifies elongation of rallies that makes us confident to revise support base at 18900, as it is confluence of:

• a) since March Nifty has not corrected more than 400 points. In current scenario 400 points correction will mature at 18945 • b) 61.8% retracement of current up move (18645-19434), at 18913

Nifty Bank: 44301

Technical Outlook???????

• The day’s price action formed a Doji with higher high -low indicating some slow down in momentum after over 2100 points gain in index in just five sessions led prices to short term overbought trajectory . However only a decisive close below previous session low would indicated some short term breather

• Going ahead, we expect, index to maintain its upward trend and head gradually towards 46300 in July as it s 138 . 2 % external retracement of Dec -Mar decline (44151 - 38613 ) . The breakout from six months consolidation backed by faster pace of retracement helped index to record a fresh All Time High and signals structural improvement from medium term perspective

• From structural perspective, any temporary breather from hereon would provide fresh investment opportunity to ride the uptrend wherein we expect PSU banks to now start catchup activity with private peers

• The formation of higher peak and trough on the larger degree chart makes us confident to revise support base at 44000 as it is 61 . 8 % retracement of most recent upmove from lows of 43300

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631

Above views are of the author and not of the website kindly read disclaimer