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Nifty : 18755

Technical Outlook

• The index started the session on a positive bias however minor profit booking near all time high dragged index lower. The daily price action formed a dark cloud cover carrying bear candle while maintaining higher high-low, indicating breather at higher levels. In the process, broader market endured its relative outperformance.

• Going ahead, we expect Nifty to challenge lifetime highs of 18887 and gradually head towards 19300 in the month of July. However, the move towards 19300 would be in a non linear manner as bouts of volatility owing to global development can not be ruled out. Thus, any dip from hereon should not be construed as negative instead capitalised it to build a portfolio by accumulating quality stocks from medium term perspective as we do not expect index to breach the key support of 18400.

• We expect, broader market to endure its relative outperformance as Nifty midcap index continued with its record setting spree over fifth consecutive session while small cap index is still 11% away from its all time high. Key point to highlight is that, over past 12 weeks Nifty midcap and small cap indices have rallied >20% leading to overbought condition. However, there is no signs of weakness yet as the broader structure remains robust. Thus, any profit booking from higher levels should not be construed as negative instead it should be used to accumulate quality stocks that would pave the way for subsequent 25% rally in Midcap index over next 12 months

• Structurally, formation of higher high-low on the weekly and monthly chart signifies elevated buying demand that makes us confident to retain support base at 18400 as it is confluence of:

• a) since March Nifty has not corrected more than 400 points. In current scenario 400 points correction will mature 18465

• b) 50% retracement of current up move (18060-18881)

• c) current month’s low of 18464

• In the coming session, the index is likely to open on a soft note tracking subdued global cues. We expect, index to consolidate near Lifetime highs amid overbought conditions. Hence, use intraday pullback in June future towards 18872-18898 to create intraday short positions for target of 18784 with a stoploss of 18937.

Nifty Bank: 43634

Technical Outlook

• The index started the session on a subdued note and gradually inched southward as the day progressed . As a result, daily price action formed a bear candle confined within Thursday’s long bear candle, indicating prolonged consolidation that has helped to cool off the overbought conditions (weekly stochastic cooled off to 51 )

• We expect, the index to prolong the ongoing consolidation 44500 -43400 and form a higher base above 50 days EMA which would gradually set the stage to challenge the upper band of consolidation placed at 44500 . A decisive close above 44500 would lead to extension of rally towards 45500 as it is confluence of :

• A) implicated target of ongoing consolidation 44500 -43400

• B) 123 . 6 % external retracement of Dec -Mar decline 44151 -38613 is placed at 45458

• Structurally, Bank Nifty has formed a higher base after witnessing a faster retracement wherein it retraced past 14 weeks decline (44151 -38613 ) seen during Dec22 -Mar23 in just seven weeks . Faster retracement in just half the time interval indicates structural improvement from medium term perspective . However after such sharp rally consolidation near life highs has made larger trend healthier

• On the downside, 43400 would continue to act as key support as it is confluence of the last four weeks identical lows and the 50 % retracement of the recent up move (42582 -44498 ) . Only a decisive close below 43400 would lead to an extended correction else prolongation of ongoing consolidation

• In the coming session, the index is likely to open on a muted note amid subdued global cues . Over past three day’s index has been facing stiff resistance in the vicinity of 44000 levels and sustaining below its 20 days EMA . Hence, create short position in the range of 43915 -43985 for the target of 43674 , maintain stoploss at 44102

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