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Nifty : 21982

Technical Outlook

Day that was…

Equity benchmarks concluded highly volatile session on a positive note. Nifty gained 32 points to settle monthly expiry session at 21983. The market breadth turned positive with A/D ratio of 1.2:1 as Nifty midcap, smallcap gained over 0.5%, each. Sectorally, financials, metal outshone while IT, healthcare extended breather

Technical Outlook

• The index witnessed a roller coaster move as it oscillated in 200 points range throughout the day amid wild swings. As a result, daily price action resulted into piercing line bull candle, indicating supportive efforts emerging at elevated support base

• The index has maintained the rhythm of witnessing buying demand from lower band of rising channel that makes us reiterate our positive stance and expect Nifty to gradually head towards 22700 in coming month. However, the move towards 22700 would be delayed due to ongoing consolidation near life highs. Within the upward sloping channel intermediate corrections have been limited to the tune of 600 points. In current scenario, as index has already corrected ~435 points from All Time High we believe, extended correction towards 21800-21700 zone would offer incremental buying opportunity. Therefore, buying dips would be the prudent strategy to adopt in quality stocks

• Midcaps and small caps have been undergoing breather as many constituents have approached overbought readings. We therefore expect these indices to undergo further retracements of past few month rally which will make a longer term up trend healthier. Stick to quality stocks with earnings visibility in this space

• Structurally, we believe Nifty is approaching maturity of seasonal correction in election year (historically, in election year index tends to bottom out in Feb/March followed by preelection rally). The strong rebound from key support highlights elevated buying demand that makes us retain support base at 21800-21700 range as it is confluence of:

A. 61.8% retracement of current up move off mid Feb low of 21530 is placed at 21823

B. Lower band of rising channel

Nifty Bank: 46120

Technical Outlook

Day that was :

The Nifty Bank closed the volatile expiry session on a positive note led by strong recovery in second half led by private banks . Nifty Bank index closed at 46120 , up 157 points or 0 .34 % for the day

Technical Outlook :

• The index started the session on a positive note only to witness quick sell of . It however recovered in second half as buying demand emerged from 61 . 8 % retracement of preceding rally (44633 -47363 ) resulting in a piercing line bullish reversal pattern on daily chart . However for meaningful rally index needs to sustain above Thursdays high (46330 ) on closing basis as over past six trading sessions index has failed to do so

• In the coming sessions, we expect index to undergo higher base as compared to identical bottoms formed in Jan and early Feb at rising 52 -week ema (44432 ) . Key point to highlight is index is undergoing retracement in slower pace as it has retraced 6 session rally (46633 - 47363 ) by 61 . 8 % over past seven sessions . We therefore recommend to adopt buy the dips strategy as we expect index to eventually hea d for target of 47500 which is a value of 80 % retracement of 16 -25th jan decline and bearish gap area

• Meanwhile, a decisive breach below immediate support of 45800 may lead to extended decline towards key support of 45100 which is

• A) 80% retracement of rally (44633 -47136 ) at 45174

• B) Equality with early February decline

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