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Nifty : 24085

Technical Outlook

Day that was .. Equity benchmarks concluded the session on a positive note, buoyed by the ease in geopolitical concerns, falling crude oil prices, and a stronger Rupee. The Nifty closed at 24,085, up ~95 points, while the broader markets outperformed. Market breadth remained positive with an A/D ratio of 1.3:1. Sectorally, Consumer durables, PSU banks and Metal were the gainer while Auto, Realty and FMCG were the laggards.

Technical Outlook :

• Nifty started the day with a positive gap-up and thereafter oscillated within ~130 points range. As a result, daily price action formed bullish candle with wicks on both ends, indicating range bound session. • Post-breakout, the index sustaining a close above the psychological level of 24,000 confirms the resumption of the uptrend and eventually head towards our revised target of 24,500 in the coming weeks. Our Constructive bias is based on following observation :

• Faster pace of retracement, as Nifty 5-session upmove has completely retraced the preceding 12-day decline.

• Crude oil breaking down below its long-term 200-day EMA and a simultaneous appreciation of the Rupee.

• Final confirmation of peace deal (on 19th June) would be the key catalyst for extension of ongoing up move.

• Bank Nifty, holding the largest sectoral weightage in the Nifty 50, has recently shown strong relative outperformance against the broader benchmark. With this bullish structural setup and sustained buying support, we expect the index to continue its northbound journey towards 59,200 level in the coming week.

• Nifty midcap has resumed uptrend after witnessing mean reversion towards its short-term averages and now just 1% away from its All Time High. Post earning revival is expected to trigger healthy catch up in small cap index which is still 7% away from All Time high.

• The current upmove is backed by improvement in market breadth as currently 65% of stocks within Nifty 500 universe are trading above their 50 days EMA compared to last 5 days prior reading of 52%. Improvement in market breadth signifies broadening of rally

• Hence any decline should be used as incremental buying opportunity as strong support is placed at 23400 Key Monitorable : Crude Oil: Brent crude is trading at two months low below $80 mark. Confirmation of geopolitical de-escalation will result into further cooloff in oil prices, boosting Indian equities market

Intraday Rational :

• Trend – Over 5-session upmove Nifty completely retraced the preceding 12-day decline, indicating faster pace of retracement.

• Levels – Buy around 80% retracement of 2 days upmove

Nifty Bank :57585

Technical Outlook

Day that was : Bank Nifty Index closed the day on positive note up 0.5% at 57585 on back of mixed global cues. Nifty PSU Bank relatively outperformed gaining 1.7%.

Technical Outlook :

• BankNifty opened on positive note and remained northward wherein intraday declines were bought into indicating elevated buying demand. The daily price action resulted into small bull candle with higher high higher low indicating positive bias. • Index has resumed its uptrend after two days breather, wherein it sustained above its gap-area signaling robust price structure. Going ahead we expect Index to gradually head towards target of 59300 levels in coming month as it is 80% retracement of Feb26-April26 decline

• Structurally, index has broken out of four months falling trend line, indicating conclusion of corrective bias that opens the door for next leg of up move. The formation of higher high-low on the weekly chart makes us revise support upward towards 56000 levels being 61.8% retracement of current up move coinciding with 200-day EMA.

• Mirroring the benchmark, PSU Bank Index also resumed uptrend after breather, signifying resumption of uptrend. Structurally Index has formed higher base above cluster of moving averages. Going ahead we expect Index to regain momentum and head towards 8800 levels being 80% retracement of current decline(9095-7800)

Intraday Rational :

• Trend - Supportive efforts emerged around its former gap support 57,100, indicating buying demand from lower level

• Levels - Buy around 80% retracement

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