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Nifty : 21779

Technical Outlook

 Day that was…

The benchmark endured its winning streak over fifth consecutive session tracking firm global cues. The Nifty concluded the session at 21779 up 124 points or 0.6%. Broader market performed in tandem with the benchmark as Nifty midcap and small cap indices gained more than 0.5%. Sectorally, FMCG, metal, pharma remained at forefront while IT took a breather.

Technical Outlook

• The index started the monthly expiry session on a positive note and gradually inched upward as intraday dips were bought into.

As a result, daily price action formed a bull candle carrying higher high-low, indicating acceleration of upward momentum. In the process, Nifty clocked a fresh All Time High of 21795

• The formation of higher peak and trough supported by improving market breadth makes us confident to reiterate our positive bias and expect Nifty to gradually head towards 22000 in coming weeks. However, key point to highlight is that, index has rallied 16% over past two months which hauled weekly stochastic oscillator in overbought conditions, indicating possibility of temporary breather can not be ruled out. However, such a breather should not be construed as negative instead it should be capitalised as incremental buying opportunity in quality stocks as strong support is revised to 21000. Our positive bias is further validated by following observations:

• A) The breakout from higher base formation post faster retracement signifies revival in upward momentum

• B) Global market setups becomes more supportive as US and European indices are coming out of two years of hiatus

• C) Declining yields, 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 retain support base at 21000 as its is confluence of 20 days EMA coincided with last week’s low of 20977

Nifty Bank: 48508

Technical Outlook

Day that was :

The Nifty Bank index continued its record setting spree on Thursday amid monthly expiry session . Nifty Bank index closed the session at 48508 , up 226 points or 0 .48 % . Nifty PSU banks index gained 1 % while private banks inched up by 0 .45 % indicating broader participation

Technical Outlook :

• The price action for the day formed a doji candle indicating intraday consolidation as some profit taking at higher levels wa s visible . Index however sustained above previous session highs maintaining overall positive bias . While we observe that prices have entered overbought trajectory, positive bias would continue as long as index sustains above Wednesday low of 47800 .

• We expect index to gradually head towards 49000 levels and therefore advise buying dips

• Meanwhile, we revise short term support to 47000 being last week’s lows that coincide with rising 20 -day ema

• Structurally, index formed a higher bottom after strong breakout above 46300 levels in faster time highlighting robust price structure and elevated buying demand . Further, participation of both private/public sector banks make the rally more dependable with large caps being in focus

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