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Nifty - 17800

Technical Outlook

The index started the week on a subdued note that hauled the Nifty to a fresh Feb low of 17255. However, fag end buying demand emerged from key support of 17200 on expected lines that helped index to recoup intraweek losses and settled the week on a positive note. Weekly price action resulted in a small bull candle carrying lower high-low, indicating buying demand emerging from key support of 17200 backed by improving market breadth

Going ahead, we expect index to hold key support of 17200 and head towards short term hurdle of 17800, sustainability above which would lead to acceleration of upward momentum towards 18300 in March as it is 61.8% retracement of past three months decline (18887-17255). Thus, any dips from hereon should be capitalized to accumulate quality stocks. Our structural positive stance is further validated by following observations: ? A) Historically, over past two decades, on all ten occasions when Nifty corrected for three consecutive months, in subsequent month, index gained average 6% from lows. Odds favour market to follow this rhythm and eventually head towards 18300 in March

B) Indian benchmarks are undergoing higher base formation over past three months after reversing CY22 decline of 18%. Within a structural bull market, secondary correction is a part of the secular bull market. Current scenario is very similar to that of CY13, CY16 and CY18. In each of these identical instances, higher base formation consumed around three to four months and retraced preceding up move by around 50-60%, followed by new highs over next quarter ? C) Despite host of negative news, India VIX (that gauge the market sentiments) has corrected 14%, highlighting low risk perception among market participants.

Rupee has seen sharp appreciation last week as DOLLAR/RUPEE pair has reacted from key hurdle of 83 and eventually breached five weeks channel, signalling pause in upward momentum for dollar and further appreciation for Rupee in coming weeks

Key sectors like BFSI, IT, Power, Infra are likely to be in limelight

On the large caps front Reliance, Kotak Bank, SBI, TCS, L&T, Jindal Steel and Power while Indian Bank, PFC, LTTS, Amber enterprises, National Aluminium, NCC, IEX, KNR Construction are preferred pick in midcap

At present, index has already retraced 44% of prior up (15183-18887) move over three month period and approaching price/time wise maturity of correction. Thus, we expect index to hold the key support of 17200 in coming weeks as it is confluence of: a) 80% retracement of past September-December 2022 rally 16748-18887, placed at 17175 b0 price parity of December decline 18887-17774 projected from end of January high of 18201, is placed at 17132

In the coming session, index is likely to open on a positive note tracking firm global cues. We expect index to witness follow through strength to Friday’s sharp up move. Hence, use intraday dips towards 17630-17662 to create intraday long positions for target of 17747 with a stoploss of 17593

Bank Nifty - 41251

Technical Outlook

The weekly price action formed a bullish engulfing candlestick pattern as the index engulfed last week sizable bear candle, indicating a pause in downward momentum .

Buying demand has emerged during last week after a base around the 200 days EMA (currently placed at 40035 ) signalling overall positive bias and opens upside towards 42000 levels in the coming week being the upper band of the last four weeks range . Follow through strength above upper band of the range will open upside towards 43200 levels in the coming weeks being the 80 % retracement of the last three months breather (44151 -39419

Structurally, since CY20 (Covid lows) intermediate corrections have lasted for 9 -11 weeks in a row . In the current scenario as well, index is seen maintaining the rhythm and resuming up move after 11 weeks of corrective decline . The index in the last 11 weeks has retraced just 65 % of its preceding 10 weeks rally of October –December (37387 -44151 ) . A shallow retracement signals a base formation and a positive price structure

The weekly stochastic is seen consolidating above the neutral reading of 40 signaling continuation of positive bias in the coming weeks

The index has key support around 39400 -39700 levels being the confluence of (a) the lower band of the last one month’s consolidation range placed around 39500 levels (b) the presence of long term 52 weeks EMA is also placed at 39430 levels

In the coming session, the index is likely to open on a positive note amid firm global cues . Index is expected to continue its positive momentum while maintaining higher high -low . Hence use intraday dips towards 41130 -41210 for creating long position for the target 41470 , maintain a stoploss of 41030

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