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Nifty : 22217

Technical Outlook

Week that was…

Equity benchmarks recorded fresh All Time High of 22297 and concluded the volatile session at 22213, up 0.7%. Broader market relatively underperformed as Nifty midcap gained 0.2% while small cap lost 0.1%. Sectorally, consumption, realty outperformed while IT, PSU underperformed

Technical Outlook

• The index recorded resolute breakout from past five week’s consolidation and settled the volatile week on a positive note. As a result, weekly price action formed a bull candle with long lower shadow, highlighting acceleration of uptrend as buying demand emerged at elevated support base

• The consolidation breakout supported by faster pace of retracement (as past four week’s decline got retraced in just a single week), signifies resumption of uptrend that makes us reiterate our positive bias and expect Nifty to head towards 22700 in coming week’s. We believe, bouts of volatility from hereon owing to global development would offer incremental buying opportunity. Thereby, dips should be capitalized to accumulate quality stocks as strong support is placed at 21800. Our positive bias is further validated by following observations:

• A) Heavyweight Banking index (commanding >33% weight) has resolved higher after forming strong base above 200-day ema

• C) Buoyant global cues as US, Japan indices hit New Highs • D) The cool off in oil prices and bond yields are likely to act as tailwind

• On the sectoral front, BFSI expected to lead well supported by IT, Oil&Gas, pharma, Capital Goods

• On the stock front, in large cap we prefer Reliance Industries, SBI, Infosys, Adani ports, Tata Steel, NTPC, Mahindra & Mahindra, Gail, ONGC while in midcaps Bank of Baroda, Cochin Shipyard, Astral, Delhivery, Havells, Coforge, Indo Count Industries, Granules, BHEL are looking good

• Structurally, Nifty appears to have approached maturity of seasonal correction in election year (historically, in election year index tends to bottom out in Feb/March followed by pre-election rally). The strong rebound from key support highlights elevated buying demand that makes us revise support base at 21800 as it is confluence of: A. 61.8% retracement of current up move off mid Feb low of 21530 is placed at 21823 B. Last week’s low is placed at 21875 C. 20 days EMA is placed around 21910

Nifty Bank: 46811

Technical Outlook

Week that was :

The Nifty Bank extended gains for second consecutive week to settle at one month high led by private banking stocks . PSU bank index retreated by 0 . 8 % after three week rally . NiftyBank settled at 46811 , up 0 .92 % for the week .

Technical Outlook

• The index started the week on a positive note while in second half was subject to mild profit taking as it entered the short term hurdle being bearish gap area (47212-48000) of 17th Jan. Price action resulted in a bull candle with small higher shadow indicating hesitance at higher levels, however maintained higher high -low on weekly time frame

• Going forward, a short term breather would make index healthier and provide an entry opportunity as private banking stocks are now witnessing upward momentum supporting already strong trends in PSU banks . We therefore recommend adopting buy the dips strategy for target of 47500 in coming week which is a value of 80 % retracement of 16 -25th jan decline and bearish gap area

• Since index has surpassed 50 -day ema and witnessing good breadth we are vising short term support to 45800 levels as it is confluence of :

• A) 50 % retracement of past six session rally (44633 - 47136 ) at 45800

• B) rising 100 -day ema (45731 )

• 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 .

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