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Nifty : 19672

Technical Outlook

The Nifty started the week on a flat note and gradually inched southward as intraday pullbacks were short lived. As a result, daily price action resulted into bear candle carrying lower high low over second consecutive session, indicating breather after recent sharp up move.

• Going ahead, we expect Nifty to undergo heathy consolidation in the 20000-19500 range ahead of FOMC meet and monthly expiry amid progression of earning season which would eventually help index to cool off the overbought conditions and gradually pave the way for next leg of up move. Thus, dips should be utilised as incremental buying opportunity as strong support for the Nifty is placed at 19500.

• The Nifty midcap index is oscillating in a narrow range over past six sessions amid overbought conditions, indicating possibility of temporary breather after 27% rally off March low can not be ruled out. However, key point to highlight is that, the current up move is backed by sturdy market breadth as currently 75% stocks are trading above 200 DMA, highlighting inherent strength. Thus, any temporary breather should be capitalized to accumulate quality stocks amid ongoing earning season

• Structurally, Nifty has not corrected for more than 400 points while sustaining above 20 days EMA. Thus, any decline from hereon should not be construed as negative instead capiatliase it as an incremental buying opportunity. Thus, we revise our support base upward at 19500, being confluence of:

• A) 38.2% retracement of current up move (18645-19991), at 19478

• B) 20 days EMA is placed at 19425

• C) Since March index has not closed below previous weeks low. Last week’s low is placed at 19562

Nifty Bank: 45923

Technical Outlook

• The Daily price action formed a bear candle with lower high -low indicating breather and selective profit booking at life highs while PSU banking stocks relatively outperformed on expected lines

• We maintain positive bias in the index and expect it to gradually head towards 46800 levels Use dips as a buying opportunity

• Structurally, PSU banks are expected to relatively outperform as PSU banking index is poised for multi year breakout indicating structural turnaround . Correction in PSU stocks remains a buying opportunity

• Key short term support is now being revised upwards to 45200 being last Tuesday’s low that coincides with rising 20 -day ema which has been held on multiple occasions since March 2023

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