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Nifty: 21772

Technical Outlook

Week that was…

Equity benchmarks started the week on a subdued note and concluded the Monday's session at 21772, down 82 points or 0.4%. The market breadth turned slightly in favour of declines with A/D ratio of: 1:1.4. Sectorally, pharma, oil & gas outperformed while consumption relatively underperformed

Technical Outlook

• The fag end sell off dragged index below Friday’s low of (21805). As a result, daily price action formed a bear candle carrying lower high-low, indicating breather amid stock specific action

• Going ahead, we expect Nifty to form a higher base amid stock specific action that would set the stage to resolve higher and gradually head towards 22200 in the coming week. In the process, volatility would prevail amid progression of earning season and global development. Thus, dips should be capitalized as incremental buying opportunity as immediate support is placed at 21400. Our positive bias is further validated by following observations

• A) Bank Nifty to undergo base formation in the broader range of 47500-44800 above 52 weeks EMA wherein PSU banks and Housing Finance Companies will relatively outperform.

• B) The current up move is backed by improvement in market breadth as currently 70% stock are trading above their 50 days EMA compared to last week’s reading of 64%

• C) The cool off in Bond yield would provide impetus to global equities

• The index snapped two weeks breather and formed a higher high-low, indicating rejuvenation of upward momentum that makes us revise support base at 21400 as it is confluence of: A. 50% retracement of mid Dec-Jan rally (20508-22124) B. Last week’s low is placed at 21430

Nifty Bank: 45825

Technical Outlook

Day that was :

The Nifty Bank extended decline on Monday amid amid lack of buying demand in private banks . Nifty PSU bank index continued to outperform on the positive side . Nifty Bank index closed at 45825 , down 145 points or 0 . 3 %

Technical Outlook :

• The index started the week on a flat note led by muted global cues and then oscillated in 46000 -45700 range for rest of the session and formed a small bear candle with lower high -low on daily chart

• Going forward, we expect index to hold short term support of 44800 and form a higher bottom followed by a gradual recovery towards 47500 which is a value of falling gap area of 17th Jan 2024 . Meanwhile, earnings, global cues and upcoming RBI monetary policy would have a bearing on sentiments . PSU banks, HFCs and gold finance companies are expected to relatively outperform . We revise short term support to 44800 as it is confluence of : • 80 % retracement of past five day pullback (44921 )

• Last weeks low at 45071

• rising 200-week ema (44627 )

• Structurally, index is undergoing a retracement of November – December rally wherein it gained around 15 % over 9 week period . Index has so far retraced 50 % of the rally over past three weeks and expected to further undergo consolidation while PSU banks are exhibiting strength and likely to outperform

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