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Nifty

• The index started the session on a flat note and gradually inched upward and continued with its record setting spree over second session in a row. However, profit booking in second half pared some of initial gains. The daily price action formed a bull candle carrying higher high-low, indicating elevated buying demand

• Going ahead, we reiterate our positive stance and expect Nifty to head towards 18900 in coming month. In the process, we expect midcaps to relatively outperform as it approaches maturity of price/time wise correction. Thus, any dip from here on should be capitalised on as incremental buying opportunity as we do not expect index to breach the key support of 18100 amid global volatility. Our positive stance is further validated by following observations:

• a) Nifty continues to make higher high-low after breaking out from one year trading range

• b) Brent prices continue to trend lower in a well channelled fashion. Expect downtrend to further accelerate below 81 mark with strong resistance at 95

• c) Dollar index continued lower high-low pattern after breakdown from multi month rising channel indicating reversal which is positive for equities

• d) India VIX corrected another 10% in the week continuing its down trend highlighting low risk perception amongst market participants

• Structurally, breakout from higher base formation above 20 days EMA signifies elevated buying demand that makes us confident to revise support base at 18100 as it is confluence of:

• a) as per change of polarity concept earlier resistance of 18100 would now act as key support

• b) lower band of recent consolidation is placed at 18212

• Midcap and small cap indices have approached maturity of price/time maturity of correction after 12 weeks consolidation wherein it merely retraced 38%. Shallow retracement indicates inherent strength that augurs well for extension of next leg of up move

• In the coming session, index is likely open on a flat note tracking muted global cues. We expect index to trade with a positive bias wherein stock specific action would prevail. Thus, intraday dip towards 18680-18712 should be used to create intraday long positions for target of 18796

Nifty Bank

• The Daily price action resulted in a small bull candle with a long upper shadow indicating consolidation with positive bias after sharp up move measuring 14 % in past eight weeks which led weekly stochastic at overbought territory with reading of 91

• We expect the index to maintain positive bias and head gradually towards 44600 levels in the coming month being the 161 . 8 % external retracement of the September 2022 breather (41840 -37387 )

• Going forward, a temporary breather cannot be ruled out which will be confirmed only on formation of a lower high -low sequence . The overall price structure remains firmly positive hence, we believe breather towards the breakout area of 41800 should be used as a buying opportunity for next leg of up move

• Bank Nifty/Nifty ratio line is in steady up trend and has recently rebounded after testing its 15 months range breakout area, indicating strength and continuation of the relative outperformance

• Structurally, in the Bank Nifty rallies are getting faster and stronger while corrections are shallow, underpinning inherent strength highlighting robust price structure

• The Bank Nifty has support at 41800 mark being the confluence of the (a) 23 . 6 % retracement of the last seven weeks up move (37387 -42860 ) placed at 41780 (b) the 10 weeks EMA currently placed at 41460 levels (c) the upper band of the recent eight weeks range breakout area placed around 41800 levels

• In the coming session index is likely to open on a flat note tracking muted global cues . We expect the index to consolidate with positive bias after the recent sharp up move . Hence use intraday dips towards 43170 -43250 for creating long position for the target of 43470 , with a stoploss of 43060

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