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Nifty : 22217

Technical Outlook

Day that was…

Equity benchmarks staged a strong recovery and settled the volatile session on a positive note. The Nifty gained 22217, up 162 points. The market breadth turned positive with A/D ratio of 1.3:1. Sectorally, auto, IT, metal and FMCG remained at forefront while financials remained muted

Technical Outlook

• The index concluded highly volatile session on a positive note wherein index oscillated by >590 points during the session. As a result, daily price action formed a bull candle with long lower shadow, indicating positive bias amid elevated volatility. In the process, index recorded fresh All Time High of 22252

• The emergence of buying demand from 20 days EMA highlights inherent strength that bodes will for next leg of up move towards revised target of 22700 in coming weeks. We believe, bouts of volatility from hereon owing to global development would offer incremental buying opportunity. Thereby, dips should be capitalized to accumulate quality stocks as strong support is placed at 21600. Our positive bias is further validated by following observations:

• A)The faster pace of retracement signifies robust price structure as Nifty retraced past seven sessions decline in just four sessions

• B) Heavyweight Banking index (commanding >33% weight) has resolved higher after forming strong base above 200-day ema

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

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

• Structurally, Nifty appears to have approached maturity of seasonal correction in election year (historically, in election year index tends to bottom out in Feb/March followed by preelection rally). The strong rebound from key support highlights elevated buying demand that makes us retain support base at 21600 as it is confluence of:

A. 80% retracement of current up move off mid Feb low of 21530 is placed at 21667

B. Last week’s low is placed at 21530 C. 50 days EMA is placed around 21500

Nifty Bank: 46920

Technical Outlook

Day that was :

The Nifty Bank extended breather for second session amid volatile trade . Index however witnessed strong recovery led by PSU and private banks in second half leading index to close at 46920 , down 99 points or 0 .20 %

Technical Outlook :

• The index started the session on a muted note and then cascaded down before making a strong recovery in second half, resulting in a bullish hammer like candle that validates presence of buying demand on declines near rising 10 -day ema (46435 ) that coincides with last weeks breakout zone

• Going forward, a short term breather would make index healthier and provide an entry opportunity as private banking stocks are now witnessing upward momentum alongwith already strong trends in PSU banks . Adopting buy the dips strategy recommended for target of 47500 in coming week which is a value of 80 % retracement of 16 -25th jan decline and bearish gap area

• Since index has surpassed key hurdle and witnessing good breadth we are vising short term support to 45800 levels as it is confluence of :

• A) 50 % retracement of past six session rally (44633 - 47136 ) at 45800

• B) rising 100 -day ema (45731 )

• 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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