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Nifty: 17660

Technical Outlook

• The Nifty started the session marginally higher amid lacklustre global cues on Tuesday and then traded in a negative trajectory for rest of the session in 17600-17700 range. Markets stayed broadly stock specific on expected lines with Nifty Midcap closing above its last two months highs signalling extension of the up move. While Nifty is undergoing a breather after a 1000-point rally in preceding nine sessions, which led prices to overbought territory

• Over past two sessions the index corrected 300 points against 1000 points rally in preceding nine sessions. The index is expected to consolidate at 17500-17800 for a few sessions. Post this, we expect the Nifty to resume its uptrend towards 18100 in coming weeks with key support now at 17500 levels. Use dips as buying opportunity amid onset of earnings season. Our positive view on the market is further validated by following observations:

a) for the first time since December 2022, the index posted faster recovery of last declining segment. The Nifty recovered 15 session’s decline (18100-16800) in just eight sessions indicating structural improvement

b) 55% of the Nifty 500 constituents are above 50-day moving average this week, Strongest reading since December 2022

c) FII inflows have been supportive with US dollar in declining trend. We expect further weakness in the dollar to lead continued foreign money flow

d) India VIX closed below 12 indicating low risk perception of market participants • We expect broader markets to witness catch up activity as Nifty midcap and small cap indices have resolved out of four month falling channel indicating end of corrective phase

• Structurally, the formation of higher high-low on the weekly chart makes us confident to revise support base at 17500 as it is 31.8% retracement of three-week rally (16828-17842) coincided with rising 200-day ema (17524) In the coming session, index is likely to open on a flat note amid muted global cues. We expect index to extend consolidation amid stock specific action Hence use intraday dips in Nifty April future towards 17640-17672 for creating long position with a target of 17763, maintain a stoploss at 17599

Nifty Bank: 42265

Technical Outlook

• The daily price action formed a high wave candle which remained contained inside previous session high -low range signalling consolidation with positive bias amid stock specific action after the recent strong up move

• Going ahead, we expect the index to consolidate with positive bias and gradually head towards 43000 levels in April 2023 being the 80 % retracement of the entire decline (44151 -38613 )

• Index after almost 3100 points up move in just three weeks has approached overbought territory in daily stochastic with a reading of 86 raising probability of a temporary breather . However, this should not be constructed as negative instead dips should be used as a buying opportunity

• Key point to highlight is that the index for the first time since December 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 support at 41200 levels being the confluence of the 61 . 8 % retracement of the last week up move (40727 -42196 ) and rising demand line joining lows of the last three weeks placed at 41200 levels

• The weekly stochastic remain in uptrend and is seen sustaining above its three periods average thus supports the overall positive bias in the index In the coming session, the index is likely to open on a flat note amid muted global cues . We expect Index to consolidate its recent strong gains amid stock specific action . Hence use intraday dips towards 42140 -42220 for creating long position for the target 42470 , maintain a stoploss of 42030

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