IGI Logo

Nifty : 22648

Technical Outlook

Day that was…

Equity benchmark edged higher post US Fed outcome. Further, fall in crude oil prices boosted market sentiment. The Nifty settled the session at 22648, up 43 point. Market breadth remained in favour of advances as broader market relatively outperformed. Sectorally, auto sector remained in limelight post monthly auto numbers, along with metal, Oil & gas stocks. Meanwhile, financials took a breather

Technical Outlook

* The index staged a decent rebound after Tuesday’s fag end decline and underwent range bound activity. As a result, daily price action formed a bull candle, indicating continuation of positive momentum amid stock specific action

* The formation of higher peak and trough supported by multi sector participation makes us reiterate our positive stance and expect Nifty to resolve above 22800 that would pave the way to head towards our earmarked target of 23400 by General election outcome with immediate support is being placed at 22300. In the process, bouts of volatility ahead of general election phases amidst Q4 earning season can not be ruled out. Thus, utilising dips to accumulate quality stocks would be the prudent strategy to adopt. Our constructive bias is validated by following observations:

* A) BankNifty/Nifty relative performance chart indicates strong outperformance from BankNifty over next 3-4 months. Since 2008, in all six instances where relative ratio line turned up from cycle low, Bank Nifty outperformed by double digit over three-four months period

* B)Breadth continue to improve as percentage of stocks above 50- day ema strengthened from 55% to 73%, highlighting broader market participation

* C) Indian equities have positive correlation with the global peers. The strong setups in key European, US and Japanese market would act as tailwind

* The broader market has staged a strong rebound in current leg of rally as Nifty Midcap and small cap index clocked a new life highs that showcase robust structure of broader market which augurs well for durability of ongoing up move

* Formation of higher peak and trough makes us confident to revise support base at 22300 is based on confluence of

* a) 50% retracement of recent up move 21778-22783

* b) 50 days rising EMA is placed at 22202

* c) Last week’s low is placed at 22198

Nifty Bank: 49231

Technical Outlook

Day that was…

The Nifty Bank declined on Thursday amid profit taking in recent run up stocks . Index closed at 49231 , down 27 points

Technical Outlook

* Index traded volatile between loss and gains and eventually settled lower as intraday rallies attracted profit taking in the vicinity of psychological mark of 50000 , as 7 . 2 % gains in eight session led prices to overbought trajectory . Day’s price action formed a high wave candle with lower high low indicating extended profit taking

* We maintain our structural positive stance on index with target of 51000 for the month of May 2024 with index to relatively outperform going ahead . However after recent 7 % rally index may undergo healthy retracement wherein we expect 48000 to act as a strong support . Use buy on decline strategy with focus on corporate lenders and NBFC which are expected to do well

* Key observation has been that Bank Nifty/Nifty relative performance ratio chart indicates strong outperformance from Bank Nifty over next 3 - 4 months . Since 2008 , in all six instances, whenever relative ratio line turned up from cycle low, Bank Nifty outperformed by 5 % over three -four months period

* We revise key immediate support for Index at 48000 as it is confluence of :

* Last Fridays low

* Value of rising 20 -day ema at 48238

* 50 % retracement of past six session gains at 48026

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631