IGI Logo

Nifty

Technical Outlook

• The index failed to capitalize initial pullback post gap down opening (22032-21647) tracking muted global cues. Consequently, daily price action resulted into bear candle carrying upper shadow. As a result, index is approaching lower band of past five weeks of rising channel

• Going ahead, holding lower band of rising channel on a closing basis would keep pullback option. Failure to do so, follow through weakness below key support threshold of 21450 would lead to extended correction. Thus, formation of higher high-low would be the prerequisite to pause the ongoing correction. Meanwhile, 21900 would act as immediate resistance in coming sessions.

• Structurally, index is undergoing breather after 16% rally seen over past two months. However, formation of higher peak and trough on the larger degree chart signifies robust price structure. Thus, focus should be on accumulating quality stocks in a staggered manner amid ongoing earning season.

• The sequence of shallow retracement followed by elongated rallies signifies inherent strength that makes us confident to retain support base at 21450 as its is confluence of:

A) Lower band of rising channel as shown in adjoining chart

B) 61.8% retracement of past four week’s up move 20976-22124

C) Past three weeks low is placed at 21450

Nifty Bank

Technical Outlook :

• The index gapped down below immediate key support of 47000 mark, contrary to our expectations, leading to accelerated decline through rest of the session, resulting in strong bear candle with downward gap (47212 - 48000 ) . In the process index breached five week low indicating its corrective bias after sharp rally in preceding two months led prices to overbought readings

• Going forward, bias remains negative with strong resistance placed at 47000 mark and we need to see higher high -low on daily charts to indicate pause in downward momentum

• On the down side next important support for index is placed at 45400 levels which is a confluence of :

• rising 20 -week ema (45800 ) which is being held on many occasions during bull market corrections

• 50 % retracement of entire 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 further corrective towards 45700 would only help prices to come out of overbought trajectory . Meanwhile, PSU banks are exhibiting strength and likely to outperform

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631