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Nifty : 21782

Technical Outlook

Day that was…

Equity benchmarks witnessed a range bound activity and settled the week at 21782, down 0.3%. In the process, broader market relatively outperformed as Nifty midcap gained 0.9%. Sectorally, pharma, Oil & Gas, PSU Banks outperformed while FMCG, Private Banks underperformed Technical Outlook

• The index witnessed a range bound activity as Nifty oscillated in 2% range throughout the week. Consequently, weekly price action formed a high wave candle confined within last week’s bull candle, indicating extended breather above 50 days EMA

• Going ahead, we expect index to prolong the consolidation in the broader range of 22000-21400 that would help index to form a higher base above 50 days EMA and eventually pave the way for next leg of up move. In the process, stock specific action would prevail as we approach the fag end of the earning season. Thus, accumulating quality stocks on dips would be prudent strategy to adopt as immediate support is placed at 21400.

Our positive bias is further validated by following observations:

• A) Most global indices inched up marginally to record new 52-week highs ahead of next week’s US inflation numbers • B) steady oil prices and bond yields are likely to act as tailwind

• On the sectoral front, BFSI, IT, Pharma, Oil&Gas, Metal would remain in focus

• On the stock front, in large cap we prefer Reliance industries, Infosys, Bank of Baroda, Adani ports, Ambuja cement, Coal India, Dr Reddy while in midcaps Union Bank, Indian Hotels, ACC, Coforge, IGL, Thermax, AB Capital are looking good

• The higher base formation above 50 days EMA highlights inherent strength that makes us to retain support base at 21400 as it is confluence of: A. 50% retracement of mid Dec-Jan rally (20508-22124) B. Past two week’s low is placed at 21430 C. 50 days EMA is placed at 21316

Nifty Bank: 45634

Technical Outlook

Day that was :

The Nifty Bank settled lower for the week as RBI maintained its status quo on rates . Private banks remained under pressure while Nifty PSU bank index hit new highs gaining 5 .25 % . Nifty Bank index closed at 45634 , down 627 .40 points or 0 . 6 %

Technical Outlook :

• The index commenced the week on a muted note and traded volatile as it closed down on three out of five sessions . The price action formed a hammer like candle with lower shadow indicating buying support emerging at the support zone of 44600 -44800 . On the higher side though, index has failed to sustain above 50 -day average (46200 ) for past seventeen sessions making it an immediate resistance for coming week and only a decisive breach above that level would pave way for acceleration of momentum

• In the coming week, holding immediate support of 44600 -44800 would keep pull back options open . On a relative basis, PSU banks and HFCs are expected to relatively outperform .

• Short term support to 44600 -44800 is confluence of :

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

• Last weeks low at 45071

• rising 200-week ema (44665 )

• 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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