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Nifty :25482

Indian equities benchmark staged a modest recovery today, closing slightly higher after a volatile session to settle at 25,482 up 0.20%. However, broader market has relatively outperformed the benchmark as Nifty Mid and Smallcap gained 0.60% and 1%. Sectorally, barring PSUs banks and FMCG all other indices closed in green, wherein Metals, Auto and Pharma were the top gainers.

Technical Outlook:

* The index opened with strong gains buoyed by positive global cues and a rebound in tech stocks; however, it erased much of those intraday gains in some of index heavyweights and faced selling pressure toward the close. The daily price action has formed a high-wave candle with wicks on both ends, indicating heightened volatility at elevated levels.

* Key point to highlight is that despite the previous session’s sharp decline, the index did not witness meaningful follow-through selling and remained largely within the prior day’s range which is confined with 200-day SMA (25,340). This indicates selling pressure is gradually easing, resulting in short-term consolidation near its key moving average rather than an extension of the decline.

* Structurally, over past two-weeks, index has been consolidating within a falling channel formation after a sharp rally seen in early February month. Going ahead, a decisive breakout above the upper band of this channel (25,800) could trigger a fresh directional upmove. Failure to do so may extend the ongoing consolidation, which would further strengthen the base and provide launchpad to challenge All time high (26350) in coming month.

* In this process bouts of volatility cannot be ruled out amid geopolitical worries. Hence, any decline from current level should be use to accumulate quality stocks backed by strong Q3 results. As strong support is placed around 25,200 being 200-day EMA coincided with 61.8% retracement of recent up move (24572-26341).

* On broader market front, Both Nifty Mid and Smallcap index has witnessed a follow through buying above its previous session hammerlike candle, indicating higher high-low formation. The current up move is backed by the improvement in the market breadth as currently 50% of stocks of Nifty 500 universe are sustaining above their 50-day SMA compared to early Feb reading of 20%. Such improvement in the market breadth warrants broadening of rally going ahead

Key Monitorable:

* The brent crude would be the key monitorable going forward amidst renewed geopolitical tension, that pulled it around falling resistance trendline placed at $72 range. A decisive close above $72 would fuel the momentum for next leg of up move that can add pressure on emerging markets like India

* India GDP Number

Intraday Rational:

* Trend- consolidation range 25200-26000

* Levels- Buy around 61.8% retracement of previous 2 days upmove(253423-25817)

Nifty Bank :61043

Index ended the day on a flat note to settle at 60998. Nifty PSU Bank relatively underperformed losing 0.4%.

Technical Outlook:

* Index began the day with strong opening and remained range bound inside previous session range. Consequently, daily price action formed a Inside bar candle with lower high and higher low, indicating consolidation.

* Key point to highlight, is that despite the previous session’s sharp decline, the index did not witness follow-through selling and remained largely within the prior day’s range. This indicates a pause in downside momentum and suggests that selling pressure is gradually easing, resulting in near-term consolidation rather than an extension of the decline

* BankNifty index remains structurally stronger than the frontline index. While Nifty trades nearly 3.5% below its record, Bank Nifty is positioned near its lifetime high, indicating relative outperformance. Therefore, a deceive close above 61800 (all-time high) would fuel further momentum that would open the door for next leg of up move. Failure to do so would lead to continuation of consolidation near its all-time high (61800-59700) that would make market healthy).

* Volatility is likely to remain elevated because of geopolitical uncertainty, therefore any corrective declines from current levels should be viewed as buying opportunities as strong demand zone is identified near 59,700, being 50-day EMA and 61.8% retracement of the current up move (57,783-61,674).

* Intraday Rational:

* Trend- Supportive efforts around 20-day EMA

* Levels - Buy around 61.8% retracement of previous 2 days upmove(60805-61672)

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