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Nifty

Technical Outlook

Day that was…

Nifty endured its northbound journey and clocked a fresh All Time high of 21006 post state election mandate. Consequently, benchmark outperformed the global peers. The Nifty gained 3.5% settled the week at 20969. In tandem with the benchmark, Nifty Midcap and Small cap indices continued to scale to new highs. Sectorally, BFSI, Oil & Gas, PSU remained at forefront while pharma, FMCG took a breather Technical Outlook The index witnessed a gap up opening 20268-20508 and inched northward throughout the week as assembly election outcome boosted the market sentiment. As a result, weekly price action formed a sizable bull candle carrying higher low, indicating acceleration of upward momentum The elongation of rallies followed by shallow retracement signifies robust price structure that makes us confident to revise target to 21400 in coming weeks. However, we believe the move towards 21400 would be in a non linear manner as index has rallied ~1250 points in just nine sessions that hauled daily and weekly stochastic oscillator in overbought territory signifies temporary breather at higher levels can not be ruled out. Nevertheless, such breather should not be construed as negative instead dips should be utilized as incremental buying opportunity as immediate support is placed at 20500. Our positive bias is further validated by following observations: A) The Banknifty index witnessed faster pace of retracement as it retraced 14 weeks decline in just six weeks, indicating rejuvenation of upward momentum. BFSI carries 35% weightage in the Nifty which would provide impetus for next leg of up move witnessed B) Declining yields, suppressed Brent crude oil prices and stable currency (INR/USD) along with strong institutional flows would act as tailwinds Sectorally, BFSI, Pharma, Capital goods and Infra to relatively outperform. IT, Metal space continues to provide favourable riskreward proposition On the stock front, in large cap we prefer SBI, Kotak Bank , Axis Bank, Infosys, Titan Dr Reddy, HAL, L&T, Hindalco while in midcaps Coforge, Hindustan copper, Midhani , NHPC, Union Bank of India, Zee Entertainment, TNPL are looking good The formation of higher peak and trough along with shallow retracement signifies elevated buying demand that makes us confident to revise support base at 20500 as its is confluence of 38.2% retracement of past three weeks rally (19768-21006) coincided with last week’s low of 20508

Nifty Bank

Technical Outlook

Week that was : The Nifty Bank index gaine d post RBI maintained its status quo on interest rates . Nifty Bank settled at 47262 , up 5 . 6 % higher for the

week Technical Outlook :

• The price action formed a strong bull candle for the week with large gap up (45484 ) as prices surpassed key hurdle of 46360 indicating breakout from four month consolidation

• We expect positive momentum to continue in coming week and index to head towards 48000 gradually as it is 138 . 2 % retracement of entire decline (46369 -42105 ) . However, after sharp 5 . 5 % rally, one should expect a gradual up move and therefore adopt strategy of buying dips with key support now being revised at 45900 being 38 . 2 % retracement of past week rally

• Structurally, index posted faster retracement of entire July -October decline in just four weeks highlighting robust price structure . Further participation of both private/public sector banks make the rally more dependable in terms of having further legs . We expect PSU banks to relatively outperform over medium term as the PSU bank index has given a multi year breakout

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