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Nifty : 22147

Technical Outlook

Week that was… Nifty declined 1.5% despite Fridays recovery amid high volatility last week led by geo-political worries, in tandem with global peers. Nifty Midcap index decline 2.5%. Sectorally, IT (-4.7%) was key dragger, followed by >2% cut in BFSI sector. Oil&Gas, Metals relatively outperformed with flat close

Technical Outlook:

*  The Nifty commenced the week with gap down amid weak global cues and then declined further before making sharp recovery (400 points) on Friday, as buying demand emerged near key support of 21700, despite weak sentiments, as prices approached oversold readings. Weekly price action formed bear candle with lower shadow indicating buying demand at lower levels. Easing geo-political worries, lower crude prices and recovery in global indices helped sentiments

* In the coming week, we expect Nifty to hold the Friday’s panic low of 21700 and staged a technical pullback toward immediate milestone of 22400 amid oversold conditions which remains important resistance. Further, sustainability above 22400 would pave the way to challenge life high of 22775 in coming months. Meanwhile, stock specific action will be in focus amid progression of Q4 earnings

* Key observation has been that, Nifty’s two corrections since January 2024 has been 5% each and even last week index maintained this price behaviour, by recovering post 5% correction from life highs and also held lower band of past three-month rising channel, despite geo-political worries

* Going ahead, bouts of volatility amid geo-political tensions, earnings and elections may not be ruled out. However, investors should not panic, rather continue to invest in good companies during episodes of volatility. We reiterate our structurally positive stance, as we have seen in the past that once anxiety around such events settles down, markets tend to resume their primary up trend

* Key support for Nifty at 21700 is based on confluence of:

* a) Lower band of past three month rising channel

* b) Equality of past two corrections (5%) from life highs)

* C) March lows at 21710

Nifty Bank: 47574

Technical Outlook

Week that was : The Nifty Bank index snapped four week winning streak amid global volatility triggered by geo political worries . PSU and Private banking indices decline 2 - 3 % . NiftyBank index declined 2 % for the week closing at 47574

Technical Outlook:

* Index started week with a gap down on Monday and declined for three sessions before Fridays smart recovery . Price action formed a bear candle with lower shadow indicating late recovery as sentiments boosted by signs of geo -political tensions easing

* In the coming expiry week, Bank Nifty holding Fridays panic low of 46500 would keep pull back options open and lead to gradual recovery towards last week’s high of 48200 . However, volatility is expected to remain high amid earnings, geo -political issues

* Key observation has been that index has held 100 -day ema for third time since February 2024 and remains a key support

* Structurally, index is undergoing a retracement of past couple of months rally and would help prices to come out of over bought readings .

* Key immediate support for Index is placed at 46500 as it is confluence of :

* Value of rising 100 -day ema

* 80 % retracement of recent up move (45281 - 49057 )

* Key trend line connecting swing lows of Jan,feb and march 2024

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