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Nifty : 23290

Technical Outlook

Week that was… Equity benchmarks concluded volatility driven eventful week on a positive note. Nifty settled the week at 23290, up 3.3%. Broader market performed in tandem with the benchmark as Midcap and small cap index gained ~3% each. Sectorally, IT, FMCG, auto while PSU, Oil & Gas underperformed

Technical Outlook

• The Nifty staged a stupendous recovery from 200 days EMA (after witnessing knee jerk reaction post General Election outcome), highlighting inherent strength. Consequently, weekly price action formed a small bodied bear candle with long lower shadow, highlighting elevated buying demand. Key point to highlight is that, the India VIX which gauge the market sentiment has declined sharply by 32% and closed at three week’s low indicating that market participants are now expecting low risk

• The Nifty has recovered 10% from week’s low in just three sessions and recorded highest ever weekly close. Going ahead, sustainability above 23400 would pave the way towards 23800 in the coming weeks. Failure to do so would lead to higher base formation in the 23400-22600 range amid stock specific action. Therefore, any temporary breather from hereon should be capitalized as incremental buying opportunity wherein immediate support is placed at 22600. Our positive bias is based on following observations: a. BankNifty reversed strongly from 52-week ema, maintaining its two-year rhythm, and expected to head towards 51000 b. Global setup continues to remain strong and acts as a tailwind with prospects of interest rates cut now on horizon c. Brent prices are making lower high-low and expected to remain in $ 75-85 range for extended period

• Structurally, the formation of higher peak and trough signifies robust price structure that makes us revise support base at 22600 as it is confluence of: a. A) 20 days EMA is placed at 22650 b. B) 38.2% retracement of current up move 21281-23320, placed at 22540

Nifty Bank: 49803

Technical Outlook

Week that was :

Nifty Bank index gained for fourth consecutive week despite high volatility as prospects of stable government at center led to cool market nerves . Nifty Bank index gained 1 .67 % or 820 points to close at 49803

Technical Outlook

• The index witnessed higher volatility post election results and corrected 10 % intra day before buying demand emerged at rising 52 -week ema leading to sharp recovery towards end of the week . Price action thus resulted in bear candle with large lower shadow as prices formed key bottom at 46000 mark as volatility subsided post election outcome

• Going forward we expect index to gradually head back to its life highs of 51133 in coming weeks and intermediate dips therefore should result into higher bottom and offer buying opportunity

• While RBI has maintained status quo on rates going forward global rate trajectory and progression of monsoon and budget outcome would have bearing on domestic rates which will be key monitorable

• In the process, immediate working support will be placed at 48500 levels for coming week as it is 38 . 2 % retracement of past three session gains

• As index has already undergone 10 % correction, we believe price wise correction is behind us and index to gradually continue its structural uptrend and head for new highs

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