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Nifty : 22502

Technical Outlook

Day that was…

Equity benchmarks gained 2% last week, overcoming selling by foreign investors while Global markets remain in strong uptrend hitting new highs. The Nifty settled volatile week at 22502. Broader market relatively outperformed the benchmark by gaining ~5%, each. Sectorally, barring FMCG, all other indices ended in green lead by PSU, metal, realty

Technical Outlook

* The index staged a strong recovery from 100 days EMA and recouped most of last week’s losses. As a result, weekly price action formed a bull candle with small lower shadow, highlighting buying demand at elevated support base. As a result, our buy on dips strategy worked well. In the process, Nifty midcap clocked a fresh All Time High.

* Going ahead, we reiterate our positive stance and expect Nifty to challenge All Time High of 22800 in coming weeks. In the process, volatility would remain high as expectations related to General election outcome would have bearing on market direction in the upcoming truncated week. Thus, capitalise dips as incremental buying opportunity to ride next leg of up move. Our positive stance is based on following observations:

* A) Nifty has historically corrected 6% during polling phase in past four elections and three times hit new highs around election outcome. In current scenario , index staged a rebound after correcting 4.5% from life highs

* B) Over 70% of Nifty constituents indicate further upsides at current juncture. Banking, capital goods, Oil & Gas, Power, Auto and FMCG heavyweights are indicating bullish undertone

* C) Major global indices are at life highs. Although in the short term our markets are ignoring those cues, once General election related anxiety settles down, strong global setups would act as tailwind for further market direction

* D) India VIX has cooled off after sharp up move seen during past 2 weeks. The India VIX has a tendency to rise ahead of Election and eventually fizzles out post election outcome

* Structurally, formation of higher peak and trough makes us confident to revise support base at 22000 as it is 80% retracement of current up move (21821-22502)

Nifty Bank: 48199

Technical Outlook

Day that was…

The Nifty Bank index maintained its wining streak on Friday and Saturday to inch up gradually . Index concluded Saturdays special session at 48199 , up 84 points or 0 .17 %

Technical Outlook

* The Bank Nifty has gained 1200 points over past five sessions from key support of 47000 levels and in the process retraced preceding eight session decline by little over 38 . 2 % . Slower pace of retracement indicate extended consolidation in coming week with positive bias in the broad range of 49000 -47000 levels . Hence buying dips would be prudent approach

* Since late Jan’24 low of 44633 , index is following a well channeled up move forming higher bottoms in the vicinity of rising 100 -day ema (47050 ) . Last week index respected this price behaviour and staged recovery from 47000 mark

* Structurally, current decline from life highs is a healthy retracement and therefore does not alter positional bullish stance . We therefore expect that current decline would result into a higher base formation around 47000 followed by resumption of rally

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