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Nifty : 19765

Technical Outlook

• The index pared initial gains and settled below 19800 levels as fag end profit booking dragged Nifty 150 points lower. Consequently, daily price action formed a bull candle with an upper shadow, indicating profit booking at higher levels. In the process, Nifty Midcap and small cap clocked a fresh All Time High, highlighting relative outperformance. Meanwhile, key monitorable like falling crude oil prices and RBI’s stance on increasing the risk weights for personal loans and credit cards would have bearing on the price action in today’s session.

• The breakout from falling trend line coupled with improving market breadth makes us believe index will continue to trade with a positive bias and gradually head towards psychological mark of 20000 in coming weeks as it is 80% retracement of Sept-Oct decline (20222-18838), placed at 19945. Thus, bouts of volatility would offer incremental buying opportunity as strong support is placed at 19300 which we expect to hold. Our positive bias is further validated by following observations:

• A) The improvement of market breadth signifies broader market participation

• B) The breach of October low in Brent crude oil would provide impetus to equity market • C) Further drop in dollar index along with cool off in global yields would provide impetus for acceleration of up move

• The sequence of higher lows signifies buying demand at elevated support base that makes us revise the support base upward at 19300 as it is 50% retracement of past two weeks rally (18838-19691) coincided with 100 days EMA placed at 19314 and past two week’s low of 19310

Nifty Bank: 44161

Technical Outlook

• The price action for the day formed a higher wave candle with identical highs as of Wednesday (44400 ) indicating pause in upward momentum for second session . However, index held Wednesdays bullish gap area (43890) which remains immediate support for coming session . Meanwhile, RBI’s stance on increasing the risk weights for personal loans and credit cards would have bearing on the price action in today’s session .

• We maintain positive stance and short term target of 44700 levels as it is 61 . 8 % retracement of entire down move (46310 -42105 ) .

• Key short term support is placed at 43200 which we expect to hold in case of volatility, as it is a confluence of :

• 50 % retracement of past two weeks up move (42105 -44056 ) placed at 43080

• value of rising 200 days ema is placed at 43272

• 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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