Nifty Reclaims 23,000, Hits Intraday High of 23,056 - ICICI Direct
Nifty : 22997
Technical Outlook
Day that was ..
The Nifty staged a strong recovery on Thursday, surging approximately 374 points, or 1.66%, to close at 22,997. However, market breadth turned weak with advance-decline ratio of 1:1.6, indicated that the recovery was concentrated in select heavyweights. IT and financials led the market higher as the day's top-gaining sectors. Conversely, FMCG, and PSU banks lagged, facing the heaviest selling pressure.
Technical Outlook :
• The index initially witnessed a subdued start, but swiftly reversed course to march relentlessly northward throughout the session. This persistent buying momentum in large-caps resulted in a sizable bullish candle that reclaimed the critical psychological benchmark of 23,000 on an intraday basis, reaching a high of 23,056.
• The index witnessed strongest single day up move (1.66%) in last four months that helped index to resolve out of two months falling trend line and reclaimed its 20-day EMA, signaling an improvement in the short-term technical structure. Additionally, the Nifty crossed above the previous week's high for the first time in nine weeks, indicating a potential shift in the prevailing corrective trend.
• Going ahead, the index's ability to sustain above the reclaimed 20- day EMA and hold above the previous week's high would be crucial to maintaining the improving technical structure. A decisive breakout above 23,100 (which aligns with the 38.2% Fibonacci retracement of the preceding nine-week decline) would further confirm the strengthening bullish bias, while failure to clear this resistance could lead to consolidation in 23000-22200 zone.
• Key point to highlight is that, the ratio chart of Nifty Private Bank vs Nifty has broken out of five years falling channel that augurs well for relative outperformance going ahead.
• The Nifty Midcap index experienced a decline of 0.37%, whereas the Smallcap index saw a more significant drop of 1.39%. This discrepancy underscores the limited engagement of the broader market, even as the benchmark has shown a substantial increase. For a sustainable upward movement to materialise, it is essential that the rally gains wider traction across various segments of the market.
• The panic low of 22,180 (printed last Thursday) remains the definitive major support, with the recent rebound from the 22,200– 22,300 zone reinforcing the significance of this long-term support
Key Monitorables
• Crude Oil
• US 10 Year Treasury Yields
Intraday Rational :
Trend – Close above 20-day EMA, signifies revival in uptrend
Levels – Buy around 50% retracement of Thursdays range
Nifty Bank : 55810
Technical Outlook
Day that was :
Bank Nifty ended the Sensex expiry session 0.89% higher at 55810, supported by mixed global cues. However, the PSU Bank index underperformed, declining 1.4% during the session
Technical Outlook :
• The index opened on a positive note and continued its northward journey, forming a higher-high and higher-low structure as intraday declines attracted buying interest. consequently, forming bull candle, indicating a positive bias.
• Bank Nifty reclaimed its 20-day EMA and advanced towards 56,100 before witnessing some profit-booking in the final hour. A sustained move above current levels could pave the way for a gradual recovery towards the 56,400–56,500 zone, coinciding with the 61.8% Fibonacci retracement of the recent decline and the 200-day EMA.
• Key point to highlight is that, the ratio chart of Nifty Private Bank vs Nifty has broken out of five years falling channel that augurs well for relative outperformance going ahead which would help Bank Nifty to extend its rally in the coming month
• The immediate support is placed around 54,500, corresponding to the 61.8% retracement of the recent upmove from 53,785 to 55,640. The broader weekly structure remains constructive, with the index continuing to maintain a higher-high and higher-low formation.
• Nifty PSU Bank Index is consolidating in vicinity of 52-week EMA maintaining higher high higher low indicating positive momentum.
• Among oscillators, weekly stochastics is placed at ~36 levels rebounding from oversold territory indicating impending pullback.
Intraday Rational :
• Trend - Close above 20-day EMA, indicating conclusion of corrective bias
• Levels: Buy around 61.8% of Thursday range.
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