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Nifty

Technical Outlook

• The index clocked a fresh All Time High of 22124 and pared the initial gains. Consequently, daily price action resulted into spinning top candle, indicating breather after recent sharp up move

• Going ahead, we expect index to trade with positive bias and gradually head towards our earmarked target of 22300 in coming week as it is price parity of Mar-Jul 2023 rally 16828-19991 (19%) projected from Oct23 low of 18838. Structurally, formation of higher peak and trough post recent consolidation breakout signifies positive bias is intact. Thus, temporary breather should not be construed as negative instead focus should be on constructing quality stocks portfolio as strong support is placed at 21700. Our positive bias is further validated by following observations.

• A) Past six sessions decline (21834-21449) got completely retraced in just three sessions, highlighting faster pace of retracement

• B) Buoyancy in global peers corroborated with our positive stance as most global indices hitting new 52-week highs

• C) Stable crude prices, declining US dollar trend to act as cushion in case of minor volatility

• The sequence of shallow retracement followed by elongated rallies signifies inherent strength that makes us confident to retain support base upward at 21700 as its is confluence of:

A) Placement of 10 days EMA at 21728

B) 80% retracement of past four sessions up move (21449- 22115)

Nifty Bank

Technical Outlook :

• The index started the Tuesdays session on muted note amid lack of global cues and then traded in a narrow range for entire session indicating lack of follow through strength to Mondays gains . Price action however resulted in higher high -low indicating continuation of positive bias .

• Going forward we expect index to eventually surpass life highs and gradually head towards 49000 levels in upcoming earnings season as it is 123 . 6 % retracement of the most recent decline (48636 -47010 ) while key support is placed at last week low of 47000 mark . We advise to use buy on dips strategy

• Structurally, index is undergoing retracement of November – December rally wherein it rallied around 15 % over 9 week period . Few weeks consolidation in the broad range of 46500 -48500 would make larger trend healthier and provide fresh entry opportunity . Hence investors should take benefit of ongoing consolidation to build long positions with focus on PSU banking space which we expect to outperform over medium term

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