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Nifty : 19398

Technical Outlook

• The index witnessed a lackluster session wherein Nifty oscillated in 80 points range. The Daily price action formed a small bear candle confined within last sessions trading range. The formation of long lower wick signifies elevated buying demand.

• Going ahead, we reiterate our positive stance and expect Nifty to head towards 19700 for coming weeks as it is 138.2% external retracement of Dec-Mar decline 18887- 16828. Key point to highlight is that past six sessions 780 points rally hauled daily stochastic oscillator in overbought territory (placed at 96), indicating possibility of temporary breather can not be ruled out. However, dips should not be construed as negative instead capiatliased it as incremental buying opportunity as key support is placed at 18900.

• On the broader market front, Nifty midcap clocked a fresh All Time High and small cap index closed at 15 months high. The current up move is backed by improving market breadth as 77% stocks are trading above 200 DMA, highlighting broader market participation. Thus, temporary breather should be capitalized to accumulate quality stocks on set of earning season

• Structurally, the formation of higher peak-trough on the monthly chart signifies elongation of rallies that makes us confident to revise support base at 18900, as it is confluence of:

• a) since March Nifty has not corrected more than 400 points. In current scenario 400 points correction will mature at 19020

• b) 61.8% retracement of current up move (18645-19434), at 18913

Nifty Bank: 45151

Technical Outlook:

• The day’s price action formed second consecutive Doji with price action contained within Tuesday’s high -low range (45000 -45655 ) indicating some slow down in momentum after over 2100 points gain in index in just six sessions led prices to short term overbought trajectory . However only a decisive close below past two sessions low at 45000 would indicated some short term breather

• Going ahead, we expect, index to maintain its upward trend and head gradually towards 46300 in July as it s 138 . 2 % external retracement of Dec -Mar decline (44151 - 38613 ) . The breakout from six months consolidation backed by faster pace of retracement helped index to record a fresh All Time High and signals structural improvement from medium term perspective

• From structural perspective, any temporary breather from hereon would provide fresh investment opportunity to ride the uptrend wherein we expect PSU banks to now start catchup activity with private peers

• The formation of higher peak and trough on the larger degree chart makes us confident to revise support base at 44000 as it is 61 . 8 % retracement of most recent upmove from lows of 43300

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