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Nifty : 22041

Technical Outlook

Week that was…

Equity benchmarks recouped intra-week losses and settled the volatile week on a positive note. The Nifty gained 1.2% to settle the week at 22041. However, broader market relatively underperformed as Nifty midcap gained 0.4% while small cap remain lost 0.5%. Sectorally, auto, Oil & Gas, PSU remained at forefront while metal, FMCG underperformed

Technical Outlook

• The index started the week on a soft note and gradually inched northward. As a result, weekly price action formed a bull candle with lower shadow, highlighting buying demand at elevated support base.

• The index has formed a higher base above 50 days EMA while absorbing host of negative news, highlighting inherent strength. Going ahead, we believe Nifty is poised for a breakout from five weeks of consolidation and gradually head towards 22700 in the month of March as seasonal correction in election year approaches maturity (historically, in election year index tends to bottom out in Feb/March followed by preelection rally). Thereby, bouts of volatility should not be construed as negative instead adopt buy on dips strategy which has been faring well as currently strong support is placed at 21400. Our positive bias is further validated by following observations

: • A) Heavyweight Banking index (commanding >33% weight) has formed a strong base at 200-day ema

• B) The most of global equity markets are hovering around their 52-week highs, indicating buoyant global cues

• C) steady oil prices and bond yields are likely to act as tailwind

• On the sectoral front, BFSI expected to lead well supported by IT, Oil&Gas and Auto stocks

• On the stock front, in large cap we prefer Reliance Industries, SBI, Infosys, Adani ports, Tata Steel, NTPC, Gail, ONGC while in midcaps PNB, GPPL, Granules, BDL, Mastek, Sandhar Tech., Havells, Sudarshan Chemicals, EIH are looking good

• The strong rebound from key support highlights elevated buying demand that makes us revise support base at 21400 as it is confluence of: A. 50% retracement of mid Dec-Jan rally (20508-22124) B. Past three week’s low is placed at 21430 C. 50 days EMA is placed at 21385

Nifty Bank: 46384

Technical Outlook

Week that was :

The Nifty Bank staged decent recovery in second half of the week to close in green led by private and PSU banks alike . NiftyBank settled at 46384 , up 1 .64 % or 750 points for the week . Nifty PSU bank index gained 2 .74 % to extend its winning streak for third week in a row

Technical Outlook :

• The index started the week on subdued note, however gained in all subsequent four trading sessions as buying demand emerged at 200 -day ema (44800 ) . In the process price action formed at bull candle with lower shadow on weekly time frame indicating strong support around 200 -dema for fourth week in a row

• Key takeaway is that index sustained above its 50 -day ema (46060 ) for the first time in one month indicating strength and positive momentum . While PSU banks continue outperformance, buying in private banks is a sign of relief . We expect index to gradually head towards 47500 in coming weeks which is a value of 80 % retracement of 16 -25th jan decline and bearish gap area

• Index has undergone a strong base formation over past month in the vicinity of 52 -week ema Thereby, we retains short term support to 44600 -44800 zone is confluence of :

• A) 61 . 8 % retracement of October – December rally (42105 -48636 ) at 44600

• B) Last weeks low at 44633

• C) rising 52-week ema (44280 )

• 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 .

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