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Nifty : 20926

Technical Outlook

* The index started the session with a positive gap (20926- 21074) and endured its northbound journey tracking firm global cues. The daily price action formed a bull candle carrying higher high-low, indicating acceleration of upward momentum. In tandem with the benchmark, Nifty midcap and small cap indices logged a fresh All Time High

* The shallow correction followed by elongated rallies signifies robust price structure that makes us confident to reiterate our positive stance and expect Nifty to head towards 21400 in coming week. Thus, dips should be capitalized to accumulate quality stocks as strong support is place at 20800. Our positive bias is further validated by following observations:

* A) The Banknifty index has 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

* B) Declining yields, suppressed Brent crude oil prices and stable currency (INR/USD) along with strong institutional flows would act as tailwinds

* The formation of higher peak and trough along with shallow retracement signifies elevated buying demand that makes us confident to revise support base at 20800 as its is confluence of 38.2% retracement of past three weeks rally (19768- 21210) coincided with last week’s low of 20770

Nifty Bank: 47732

Technical Outlook :

* The price action for the day resulted in a bull candle with an unfilled gap underneath (47200 -47510 ) which will act as immediate point of support for coming few sessions . Index has rallied 4000 points over 12 sessions and in the process almost achieved target of 48000 leading index in overbought trajectory

* Going forward, we expect prices to consolidate around psychological mark of 48000 while maintaining overall positive bias . Only a sustained move above 48000 would lead to further gains towards 48600 levels . Use dips as buying opportunity with more focus on PSU banks and small private banks .

* Immediate short term support is now being revised to 46800 being current week’s low, that also coincides with rising 10 -day average (46710 )

* 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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