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Nifty : 21572

Technical Outlook

Week that was… Indian equity benchmarks underwent profit booking during last week amid muted global cues and selling in heavyweight private bank amid earnings disappointment. Nifty declined 1.2% for the week led by 4% cut in Bank Nifty while Nifty Midcap index managed to close up 0.5%. In the meantime, PSU, Oil & Gas, IT sectors relatively outperformed

Technical Outlook

• Index witnessed elevated volatility wherein index witnessed ~1500 points move during the week. The weekly price action resulted into a bear candle (despite elevated volatility index maintained the rhythm of closing above previous week’s low over 12th consecutive week), indicating extended breather amid progression of Q3 earning season

• Going ahead, we expect prolongation of consolidation with a stock specific action that would help index to form a higher base after 17% rally seen over past two months. Eventually we expect, index to head towards 22000 mark in run up to budget. Thus, buying dips would be the prudent strategy to adopt as we expect last week’s panic low of 21300 to be held and index to pose a bounce back towards 22000 mark in run up to budget.

• On intermarket front, extended period of stable crude prices and firm global cues would act as a tailwind

• Sectorally, we expect PSU, Infra, companies with rural exposure, HFC’s, Corporate lenders, Oil & Gas to relatively outperform in runup to Union Budget

• On the stock front, in large cap we prefer Reliance, Axis Bank, SBI, Tech Mahindra, Adani Ports, BEL, GAIL, ONGC while in midcaps Aarti Industries, Balkrishna inds, Union Bank, Indian hotel, BDL, MOIL, JK Cement, Westcoast Paper, Kajaria are looking good

• The formation of outside bar signifies elongation of declines amid elevated volatility that makes us retain support base at 21300 as its is confluence of: A) Last week’s low is placed at 21285 B) 61.8% retracement of past six week’s up move 20770-22124

Nifty Bank: 46058

Technical Outlook

Week that was : The Nifty Bank index witnessed one of the sharpest declines in two yeas last week led by profit taking in HDFC bank amid earnings disappointment . PSU banks on relative terms outperformed with Nifty PSU bank index gaining 3 % . NiftyBank index closed at 46058 , down 3 .46 % , 1651 points

Technical Outlook :

• The index started the week on a firm note but faced sharp decline on Wednesday before marginal recovery off lows, thus resulting in sizeable bear candle on weekly chart indicating profit taking at life highs and loss of upward momentum . However, sharp decline led prices to oversold trajectory with daily stochastic plunging to 7 , as index approached its key support near 45400 mark . Sequence of higher high -low on daily chart would be a first sign of abating downward momentum

• In the coming truncated expiry week, we expect index to hold 45400 levels and pose a technical pull back from oversold readings with key resistance at 46800 mark which is 50 % retracement of last weeks decline • On the down side, important support for index is placed at last weeks low of 45400 which is a confluence of :

• rising 100 day ema (45700 ) which is being held on many occasions in bull market corrections

• 50 % retracement of rally (42105 -48636 ) at 45370 • Low of strongest weekly bull candle of 8 th December 2023 (45484 )

• Structurally, index is undergoing a healthy retracement of November – December rally wherein it gained around 15 % over 9 week period . Index has so far retraced 38 % of the rally over past three weeks and expected to further undergo consolidation while PSU banks are exhibiting strength and likely to outperform

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