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Nifty : 19230

Technical Outlook

• The index concluded volatile week (wherein Nifty oscillated by 900 points) on a positive note. Consequently, weekly price action formed an inside bar confined within last week’s sizable bear candle, indicating pause in downward momentum

• The index has witnessed buying demand from 200 days EMA while discounting anxiety around Fed event and geopolitical tension. We expect, index to extend ongoing pullback and gradually head towards 19600 in the coming weeks as it is placement of resistance trend line drawn adjoining Sep-Oct highs. Hence, buy on dips would be the prudent strategy to adopt with equal weight in Large and Mid-caps as strong support is placed at 19000. Our positive bias is further validated by following observations:

• A) Bank Nifty (which carries 36% weightage in Nifty) has maintained the rhythm of witnessing buying demand from 52 weeks EMA. In each of past three occasions post COVID lows, Bank Nifty rallied back to highs after testing 52-week EMA. Thus, we expect banking to lead recovery in coming weeks.

• B) Advance/Decline ratio has reverted above 1.1 during current week after recording bearish extreme of 0.27 last week indicating broad based recovery

• C) Further cool off in global and domestic yields and reversal in dollar index (<105.50) and Brent (<84) would be key catalyst for acceleration of up move

• Sectorally, BFSI, Auto, Infra, PSU to outperform in the coming week amid ongoing global volatility

• On the stock front, in large cap we prefer Axis Bank, Tata Motors, Ultratech Cement, Titan , GAIL, DLF while in midcaps Canara Bank, REC Ltd, L&T Finance, Birla soft, Network18, BDL,NMDC, Orient Cement are looking good

• The formation of higher low signifies supportive efforts at elevated support base that makes us revise the support base upward at 19000 as it is confluence of 200 days EMA coincided with last week’s low of 18940

Nifty Bank: 43318

Technical Outlook

• The price action for the week formed an inside day formation indicating technical bounce back after six weeks decline ( 9 % ) led prices to oversold trajectory (weekly stochastics 13 ) . Index held panic lows of 42105 early during the week followed by a recovery post Fed event cool off in volatilty

• Going forward, we expect index to continue its upward trajectory in a gradual manner towards 44000 in coming week which is value of 50 and 100 dema that coincides with 80 % retracement of preceding two week decline Meanwhile use dips as buying opportunity as we expect 42300 to act as elevated support level in coming week . Key support is placed at 42300 levels as it is a confluence of :

• Last week low at 42390

• 50% retracement of entire rally from March 2023 (38613-46369) placed at 42500

• value of rising 52-week ema which has been held on couple of occasions since CY2020 currently at 42700 (transitory breach usually is sign of capitulation)

• Structurally, Index is in the process of undergoing a retracement of March to July rally while pricing in various negatives in the process . So far index retraced 18 week rall y by 50 % over 15 week correction indicating shallow nature of retracement . Since covid lows index held 52 - week ema on three occasions, followed by new high in each case in subsequent quarters

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