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Nifty : 21854

Technical Outlook

Week that was…

Equity benchmarks concluded eventful week on a buoyant note amid elevated volatility. Nifty settled the week at 21854, up 2.35%. Broader market relatively outperformed as Nifty midcap, small cap gained 2.7% and 5.6%, respectively. Sectorally, barring FMCG, all other indices gained led by Oil & Gas, PSU, metal

Technical Outlook

• The index started the week on a buoyant note and gradually inched northward as the week progressed. However, profit booking in the fag end led index to settle the week at 21850. As a result, weekly price action formed a bull candle carrying higher high-low, indicating resumption of uptrend after two week’s breather above 50 days EMA.

• Going ahead, we expect Nifty 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)

• Last week’s low is placed at 21430 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

• On the sectoral front, Oil & Gas, Auto, Power would endure its outperformance while Nifty IT index is resuming uptrend after two weeks breather.

• On the stock front, in large cap we prefer Reliance, SBI, TCS, GAIL, SAIL, Dr. Reddy, HPCL, NTPC while in midcaps Coforge, MGL, Vardhman Textile, Canfin Home Finance, NCC, Concor, Maharashtra Bank, Jindal Steel & Power, Oil India are looking good.

• 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 (20508-221240

Nifty Bank: 45971

Technical Outlook

Week that was :

The Nifty Bank snapped four week losing streak after a volatile trading week . On the positive side, Nifty PSU bank index outperformed with 11 % gain during the week aided by lower bond yields post Union Budget . Nifty Bank index closed at 45971 , up 2 . 4 % or 1105 points

Technical Outlook :

• The index started the week on a positive note with a gap up action and gradually headed higher before profit booking setin around 47000 levels . In the process index formed a bull candle with higher high -low after a one month corrective phase making current pull back strongest in past five weeks and also surpassed hurdle of 46500 in the process

• Going forward, we expect index to hold last week low of 45000 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 expect market to focus back on earnings and global cues wherein buy on dips strategy should be adopted with focus on PSU banks, HFCs and gold finance companies which look attractively poised . 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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