15-05-2024 09:56 AM | Source: ICICI Direct
The index started the session on a flat note and gradually geared up the momentum as the day progressed - ICICI Direct

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Nifty : 22218

Technical Outlook

Day that was…

Equity benchmark extended gains over third consecutive session. The Nifty gained 114 points to settle the session at 22218. The market breadth turned positive with A/D ratio of 3:1 as Midcap, small cap indices gained >1.7%, each. Sectorally, metal, auto, Oil & gas outshone while pharma, FMCG took a breather

Technical Outlook

* The index started the session on a flat note and gradually geared up the momentum as the day progressed. As a result, daily price action formed a bull candle carrying higher highlow, indicating continuance of positive momentum. The index VIX has paused the upward momentum after thirteen consecutive sessions

* Going ahead, we expect Nifty to endure its positive bias and head towards upper band of consolidation placed at 22400. In the process, volatility would remain elevated amidst progression of election phases coupled with Q4 earning season. Thus, accumulating quality stocks on dips would be the prudent strategy to adopt as strong support is placed at 21700

* Key observations to during election phases

* A) Over past four elections, Nifty has undergone average 6% correction during polling phases. In current context index has corrected ~4% from life highs and remains in sync with empirical evidence.

*  B) The India VIX has a tendency to rise ahead of Election and eventually fizzles out post election outcome as anxiety around the event settles down. During MAY 2019, rise in VIX resulted into decline in index that in turn helped Nifty to form a higher base and set the stage for next leg of up move

* Structurally, formation of higher peak and trough makes us confident to reiterate support base at 21700. Since start of CY24, intermediate corrections have got arrested within 4.5% and subsequently Nifty has recorded new high. In the current scenario, index has already corrected 4.3% from All Time High that also coincides with 100 days EMA.


Nifty Bank: 47859


Technical Outlook

Day that was…

The Nifty Bank index continued its winning streak for second session as intra day dips attracted buying support . Nifty Bank index concluded the session 105 points higher at 47859

Technical Outlook

* The Bank Nifty started the session on a flat note and then consolidated Mondays gains to close higher . Price action formed bull candle with higher high and higher low indicating follow through to Mondays recovery and indicating further gains towards 48500 levels which is 50 % retracement of preceding eight session decline (49974 -46983 )

* Structurally, following are key observations :

* Since late Jan’24 low of 44633 , index is following a well channeled up move forming higher bottoms in the vicinity of rising 100 -day ema (47050 ) . In Mondays session index respected this price behaviour

* Further, each of preceding three corrective declines measure 5% in magnitude

* Structurally, current decline from life highs is a healthy retracement and therefore does not alter positional bullish stance . We therefore expect that current decline would result into a higher base formation around 47000 followed by resumption of rally


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