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Nifty: 21522

Technical Outlook

Week that was…

Equity benchmarks edged lower tracking mixed global cues. Nifty settled the session at 21522, down 215 points or 1%. The market breadth turned flat. Meanwhile, small cap relatively outperformed. Sectorally, PSU Bank, metal, realty outperformed while consumption, pharma took a breather

Technical Outlook

• The index pared initial gains post gap up opening and gradually drifted downward as the day progressed. The daily price formed a bear candle carrying higher high-low, indicating pause in upward momentum

• In the upcoming session, we expect volatility to remain high owing to Union Budget, US Fed meet and earnings progression. In the process, we expect index to hold the past two week’s low of 21100 and gradually resolve higher towards All Time High of 22124 in coming weeks. Structurally, with past two week’s 4.5% correction, index is entering budget week on a lighter note. Thus, accumulating quality stocks on dips would be the prudent strategy to adopt. Our positive bias is further validated by following observations:

• A) Bank Nifty has approached key support threshold of 200 days EMA amid oversold conditions, indicating impending pullback which would fuel the pullback rally in Nifty (as Bank Nifty carries 35% weightage in Nifty)

• B) The rejuvenation of upward momentum in global market signifies firm global cues that would provide impetus to domestic market

• The formation of lower high-low on the weekly chart signifies pause in upward momentum that would makes us revise support base at 20800 as its is confluence of: A. Price parity of last leg of decline 22124-21285 projected from Tuesday’s high of 21750 B. 38.2% retracement of past two months up move 18838- 22124

Nifty Bank: 45368

Technical Outlook

Day that was :

The Nifty Bank index traded lack luster on Tuesday ahead of weekly expiry but relatively outperformed Nifty led by PSU banks . Nifty Bank index closed at 45368 , down 74 points or 0 .16 %

Technical Outlook :

• The index started the session on a muted note and then oscillated in a 200 points range for most of the part before last hour selling . Price action thus resulted in a inside bar as index failed to surpass 100 -day ema (45660 ) for second session in a row

• Over past three sessions index has posed 2 . 7 % pull back, which is similar to earlier two instances in ongoing corrective phase . Strength above Mondays high that coincides with 100 -day ema (45660 ) would make current pullback larger in magnitude and would indicate further rally towards last week high of 46500 that also coincides with 50 % retracement of past one month decline (48636 -44429 ) • Meanwhile, we expect index to hold key support zone of 44300 -44000 in current Budget week despite volatility as it is confluence of :

• rising 52 -week ema (44122 ) • 61 . 8 % retracement of rally (42105 -48636 ) at 44600

• Equality of current decline with July -Oct 2023 decline ( 9 % ) at 44250 • Structurally, index is undergoing a retracement of November – December rally wherein it gained around 15 % over 9 week period . Index has so far retraced 50 % of the rally over past three weeks and expected to further undergo consolidation while PSU banks are exhibiting strength and likely to outperform

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