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Nifty: 17743

Technical Outlook

• The index recovered after the initial blip and regained upward momentum after last week’s corrective phase. As a result, it formed a bull candle carrying higher high-low after five sessions, indicating resumption of primary up trend

• Going ahead, we expect the Nifty to attempt to challenge the upper band of ongoing consolidation placed at 17800 in coming sessions. Further, a sustained move above 17800 would signal end of ongoing corrective phase and open further upsides amid Q4 earnings and monthly expiry

• Structurally, key point to highlight is that the index retraced its nine session’s rally (16913-17863) by just 30% over past six sessions indicating slower retracement, which is indicative of a healthy consolidation above 200 day EMA (17500). We believe that ongoing consolidation would make market healthier and result in a higher base formation which should not be construed negative, rather a buying opportunity

• Our positive view is further validated by following observations:

a) for the first time since December 2022, the index posted a faster recovery of the last declining segment. The Nifty recovered its 15 session’s decline (17800-16800) in just nine sessions indicating a structural improvement

b) ratio of stocks at 52-week highs vs. 52-week lows has improved significantly over past two weeks, which is a sign of improved market sentiment. From early April reading of 1:1, the ratio is currently at 4:1 with new set of pharma stocks

c) FII inflows have been supportive with the US dollar in declining trend. In April, FIIs turned net buyers, one of highest among EM basket

• We expect broader markets to witness catch up activity in gradual manner as Nifty midcap and small cap indices have resolved out of four month falling channel indicating end of corrective phase

• Structurally, the slower pace of retracement makes us confident to revise support base at 17500 as it is 38.2% retracement of threeweek rally (16828-17863) coincided with rising 200-day ema (17530) In the coming session, index is likely to open on a positive note tracking mixed global cues. The formation of higher high-low after 5 sessions corrective phase signifies revived positive momentum

in the coming session. Hence, use intraday pullback in April future towards 17700- 17732 to create intraday long positions for target of 17817 with a stoploss of 17663

Nifty Bank: 42635

Technical Outlook

• The daily price action formed a bull candle with a higher high -low signalling resumption of up move after five sessions of breather

• Going ahead, we expect the index to extend the up move and gradually head towards 43000 levels in the coming weeks being the 80 % retracement of the entire decline (44151 -38613 )

• Key point to highlight is that the index has recently for the first time since December 2022 has posted faster retracement of last major declining segment i . e . seven weeks decline (42015 -38613 ) retraced in just three weeks signalling sign of turnaround on larger degree

• Bank Nifty continues to outperform the Nifty . The Bank Nifty/Nifty ratio line continues to trend higher and sustaining above the major breakout area signalling extended period of outperformance

• The index has seen a strong up move of more than 3300 points in the last four weeks which has lead to weekly stochastic approaching overbought territory with a reading of 94 . Hence, a breather at higher levels can not be ruled out

• The index has support at 41200 levels being the confluence of the 38 . 2 % retracement of the current up move (38613 - 42714 ) and rising demand line joining the recent lows of the last four weeks placed at 41200 levels

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