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Nifty : 17398

Technical Outlook

• The index started the truncated week on a positive note wherein stock specific action prevailed. The daily price action carrying higher high-low, indicating continuance of positive bias. Meanwhile, the formation of lower shadow, highlights elevated buying demand.

• We reiterate our positive stance and expect Nifty to resolve higher towards 17600 as it is confluence of 200 days EMA coincided with upper band of falling channel and the implicated target of consolidation breakout (17200-16800). Thus, any dip from hereon towards 17100 should be looked for accumulating quality stocks in a staggered manner as it is a good time to construct portfolio from medium term perspective. Our view of extended pullback is further validated by following observations:

• A) India VIX is sustaining below 14 levels indicating further cool off, which is positive for equities

• B) Global indices have outperformed YTD with Nasdaq leading (+18%) while European indices are up in mid-teens. The domestic market has positive correlation with global peers. Currently, Nifty is down 4% YTD and expected to catch up from hereon

• C) US dollar index trending down currently at 102 which is key global positive for EM equities.

• D) Historically, episodes of higher volatility, along with negative news flow and oversold prices has been a key ingredient for durable bottom formation as usually sentiment is at its bearing extremes in such scenarios

• Broader market regained momentum after taking support from lower band of three months falling channel. The Nifty midcap index has surpassed past two weeks high, indicating pause in downward momentum that augurs well to unfold extended pullback in coming weeks

• Structurally, despite of host of negative news, index has managed to hold the key support of 16800 highlighting strong support which would continue to act as key support as it is confluence of:

• a) September 2022 low is placed at 16747

• b) 61.8% retracement of CY22 rally 15183-18887, placed at 16600 In the coming session, index is likely to open on a positive note tracking mixed global cues. We expect, index to trade with a positive bias and maintain its higher high-low formation. Hence, use intraday dip towards 17415-17447 to create intraday long positions for target of 17533 with a stoploss of 17377

Nifty Bank: 40813

Technical Outlook

• The daily price action formed a bull candle with a higher high -low signalling continuation of the pullback for the third consecutive session . The index started the session on a flat note and thereafter traded in a range with positive bias and closed near the high of the session up by 0 . 5 %

• Going ahead, we expect the index to maintain positive bias and head towards 41300 levels in the coming week being the 80 % retracement of the February -March 2023 breather (42015 -38613 ) . With key support is placed at 39600 , dips should be used as a buying opportunity

• Bank Nifty/Nifty ratio line continues to trend higher and sustain the above major breakout area signalling continuation of the outperformance

• Structurally, ongoing corrective phase has already consumed 16 weeks to retrace 80 % gains of preceding 10 weeks rally of October –December (37387 -44151 ) . A slower pace of retracement signifies corrective nature of current decline

• The index has support at 39600 levels being the confluence last Wednesday’s low and the 50 % retracement of the last two weeks pullback (38613 -40690 )

• The weekly stochastic has generated a buy signal moving above its three periods average thus supports the continuation of the current pullback in the index in coming weeks In the coming session, the index is likely to open on a flat to positive note amid mixed global cues . Index is expected to consolidate its last two sessions gain and trade with positive bias . Hence use intraday dips towards 40740 -40820 for creating long position for the target 41070 , maintain a stoploss of 40630

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