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Nifty : 21840

Equity benchmarks defied global sell off owing to higher than expected US inflation. The Nifty concluded Wednesday’s session at 21840, up 97 points or 0.5%. The market breadth turned positive with A/D ratio of 2:1 as broader market relatively outperformed. Sectorally, financials, Oil & Gas, metal, auto outshone while IT, pharma took a breather

Technical Outlook

• The index witnessed a gap down opening (21743-21578) tracking weakness in global peers tracking US inflation data. However, buying demand from Tuesday's low of 21543 helped index to recoup intraday losses and settle the session near days high. Consequently, daily price action formed a sizable bull candle that engulfed past three sessions trading range, indicating pause in downward momentum as host of negative news are getting price in

• The index has undergone slower pace of retracement as over past eight sessions it retraced 61.8% of preceding seven sessions up move (21137–22126), highlighting robust price structure. This makes us confident to reiterate our positive stance and expect index to challenge the life highs of 22124 in the coming month. The bottom up approach of Nifty 50 component highlights robust price structure that bodes well for next leg of up move. Thereby, we advise to adopt buy on dips strategy which has been faring well

• The formation of lower high-low on the weekly chart indicates short term corrective bias that makes us revise support base at 21100 as it is confluence of: A. 61.8% retracement of mid Dec-Jan rally (20508-22124) B. January 2024 low is placed at 2113

Nifty Bank: 45502

The Nifty Bank staged a strong rebound and concluded Wednesday’s session on a positive note and settled at 45908 , up 406 points or 0 . 9 % . PSU Banking index zoomed 3 . 2 % to settle at 6934

Technical Outlook :

• The index recouped initial losses post gap down opening and settled the session near days high . As a result, daily price action formed a sizable bull candle while sustaining above 200 days EMA, indicating strong base formation

• The index has closed above previous day’s high for the first time in eight sessions, indicating pause in downward momentum . Going ahead, for acceleration of upward momentum index need to decisively close above 50 days EMA (placed at 46050 ) which has been acting as stiff resistance over past one month which would pave the way to head towards 47000 in the coming month

• We believe, index has undergone strong base formation above 200 days EMA and set the stage for next leg of up move . Thereby, we retains short term support to 44600 -44800 zone is confluence of :

• A) 61 . 8 % retracement of October – December rally (42105 -48636 ) at 44600 • B) Last weeks low at 45071 • C) 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 .

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