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Nifty : 22368

Technical Outlook

Day that was…

Equity benchmark extended gains over third session in a row tracking firm global cues. Nifty settled the session at 22368, up32 points. The market breadth remained sturdy with A/D ratio of 1.5:1 as Nifty midcap, small cap gained over 1%, each. Sectorally, FMCG, auto, realty outperformed while pharma, metal, oil & gas took a breather

Technical Outlook:

• The Nifty witnessed a range bound activity post positive opening and traded in 100 points range. The daily price action formed a small bear candle carrying higher high-low formation, highlighting positive bias amid stock specific action. In the process, Nifty Small cap index clocked a fresh All Time High, indicating broader market participation. Key point to highlight is that, the India VIX has plunged 20% in a single day which is a rare event (seen during 2019,2014), indicating participants are gauging low risk in the market amid receding geopolitical tension ahead of general election that would provide impetus to resolve out of ongoing consolidation

• Going ahead, we expect Nifty to endure its northbound journey and gradually challenge the life high of 22775 in coming month. In the process, we expect Nifty to hold the key support of 22000. Thus, buying dips would be the prudent strategy to adopt amid progression of Q4 earnings

• Structually, key observation has been that, Nifty’s two corrections since January 2024 has been 5% each and even last week index maintained this price behaviour, by recovering post 5% correction from life highs and also held lower band of past three-month rising channel, despite geo-political worries

• Going ahead, bouts of volatility amid geo-political tensions, earnings and elections may not be ruled out. However, investors should not panic, rather continue to invest in good companies during episodes of volatility. We reiterate our structurally positive stance, as we have seen in the past that once anxiety around such events settles down, markets tend to resume their primary up trend • Formation of higher peak and trough makes us confident to revise support base at 22000 is based on confluence of:

• a) 61.8% retracement of recent up move 21778-22447

• b) 20 days EMA is placed at 22130

Nifty Bank: 47970

Technical Outlook

Day that was :

The Nifty Bank index eked out marginal gains on Tuesday after a lack luster trading session . Nifty Bank index closed the session at 47970 , up 45 points

Technical Outlook :

• Index opened on positive note to achieve short term target of 48200 In morning trade before surrendering gains after three session rally as last weeks high and falling gap area proved a hurdle . Higher high -low formation however continued maintaining positive bias for upcoming session

• Over next couple of sessions, slow down in upward momentum may not be ruled out as index may undergo some volatility triggered by expiry flows . However, a dip would offer incremental buying opportunity as eventually we expect index to take out 46200 levels and head towards life highs of 49000 mark . PSU banks and NBFCs would be in focus amid of earnings

• Key observation has been that index has held 100 -day ema for third time since February 2024 and maintained its rhythm of higher bottom indicating improving price structure

• Structurally, index is undergoing a retracement of past couple of months rally and would help prices to come out of over bought readings .

• We revise key immediate support for Index at 46900 as it is confluence of :

• Value of rising 100 -day ema

• 80 % retracement of past three day gains

• Key trend line connecting swing lows of Jan,feb and march 2024

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