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Nifty : 21453

Technical Outlook

• The index recouped initial losses and settled the session on a flat note. As a result, daily price action formed a small bear candle with lower shadow, indicating supportive efforts at elevated support base. In the process, Nifty midacap, small cap indices clocked a fresh All Time High

• The index is undergoing a healthy consolidation amid stock specific action post recent sharp up move. However, broader structure remains robust exhibited by elongation of rallies followed by shallow retracement that makes us confident that index would head towards the psychological mark of 22000 in coming weeks as it is upper band of upward sloping channel (drawn adjoining CY22-23 lows along with Dec-22 high of 18887.

• Structurally, past three weeks sharp up move of >1800 points have hauled weekly stochastic oscillator in overbought territory, indicating possibility of temporary breather can not be ruled out. However, such breather should not be construed as negative instead dips should be utilized as incremental buying opportunity as immediate support is placed at 20800 which we expect to hold. Our positive bias is further validated by following observations: A) The follow through strength post faster retracement resulted into running breakout in Bank Nifty while Nifty IT index regained upward momentum after two months hiatus. Cumulatively both indices carries ~50% weightage in Nifty which would provide impetus for next leg of up move B) Strong domestic macros, lower Brent crude prices, expectations of rate cuts globally would continue to act as tailwinds

• The formation of higher peak and trough along with shallow retracement signifies elevated buying demand that makes us confident to revise support base at 20800 as its is confluence of 38.2% retracement of past three weeks rally (19768-21492) coincided with last week’s low of 20770

Nifty Bank: 47870.90

Technical Outlook :

• The price action for the day formed another inside bar candle within last Fridays trading range indicating pause in upward momentum led by profit booking in some heavyweights after sharp run up over past two weeks led prices in to overbought trajectory . Daily and weekly stochastics above 93 indicate momentum to slowdown therefore we maintain our stance on buying dips with an expectations of index gradually heading towards 49000 mark

• Meanwhile we revise short term support to last week’s low of 46800 levels which also coincides with rising 10 day ema

• Structurally, index posted faster retracement of entire July -October decline in just four weeks highlighting robust price structure . Further participation of both private/public sector banks make the rally more dependable in terms of having further legs . We expect PSU banks to relatively outperform over medium term as the PSU bank index has given a multi year breakout

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