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Nifty : 19732

Technical Outlook

* The index recouped most of initial losses in a narrow rage for major part of the session, consequently Nifty formed an inside bar confined within Friday’s trading range (19805- 19635), indicating extended breather amid stock specific action

* Going ahead, we expect volatility to remain high amid global uncertainty due to geopolitical concerns. Thus, any dip towards 19500 should be capitalized as an incremental buying opportunity as we expect Nifty to gradually challenge the immediate hurdle of 19800. In the process, stock specific action likely to continue amid ongoing Q2 earning season. Further, sustainability above 19800 level for next couple of sessions would lead to acceleration in up move

* The formation of higher high and low on the weekly chart signifies conclusion of corrective bias that makes us confident to retain support base upward at 19300 as it is confluence of 100 days EMA is placed at 19296 coincided with current months low of 19333

* Since CY20 low, on six out of nine occasions mean reversion towards 50 days EMA along with strong market breadth (where >50% stocks of Nifty 500 are trading above 50) offered fresh entry opportunity. Despite current market volatility, >60% of stocks are trading above 50 days EMA, indicating shallow nature of correction across mid and small cap space signifying inherent strength. Both indices have been undergoing healthy consolidation wherein over past five weeks it retraced less than 50% of preceding 4 weeks’ rally. The slower pace of retracement signifies robust price structure.

Nifty Bank: 44225

Technical Outlook

* The price action on Monday formed second high wave candle as prices consolidated in narrow range . Back to back high wave candles indicate loss of momentum as markets awaits further directional cues from earnings and inflation trajectory going ahead . Sustained recovery above Mondays high 44356 would be first sign of strength in the short term

* Going forward, we expect index to hold key support of 43500 -43800 and attempt a pull back towards 44800 - 45000 which is past three weeks high and immediate hurdle

* Structurally, Index has undergone a healthy retracement over past twelve weeks making overall trend healthy

* Our positive view is based on following key observations

* Index has retraced 18week rally (38613-46369 ) by just 38 . 2 % over 11 weeks indicating inherent strength

* Private banks have undergone decent price/time correction and placed at oversold readings

* PSU bank index has given a breakout from decade long consolidation indicating structural turnaround 

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