IGI Logo

Nifty : 24044

Technical Outlook

Day that was

Equity benchmarks extended gains over fourth consecutive session and clocked a fresh All time high of 24087. However, market breadth remained in favour of declines with A/D ratio of 1:1.8 as small caps underwent profit booking. Sectorally, IT remained in limelight while PSU Banks took a breather

Technical Outlook:

* The index started the session on a positive note and gradually inched northward as intraday dips were short lived. Consequently, daily price action resulted into bull candle carrying higher high-low, indicating continuation of uptrend

* The formation of higher high-low supported by sector rotation signifies inherent strength that bodes well for next leg of up move towards 24200 in coming weeks. In the process, bouts of volatility owing to 12% rally (off Election outcome low) can not be ruled out. Thereby, any temporary breather from hereon should be capitalized as incremental buying opportunity as strong support is placed at 23600. Our positive bias is further validated by following observations: a. The revived traction in Nifty IT along with Bank Nifty signifies solidification of uptrend that would provide impetus for Nifty to inch northward as Nifty bank and IT index carries combined weightage of 45% b. Structurally, global markets are in an uptrend and unlikely to trigger elevated volatility. Hence, temporary breather should not be construed as negative

* Structurally, the formation of higher peak and trough signifies elevated buying demand that makes us revise support base at 23600 as it is 10 days EMA coincided with 61.8% retracement of past four sessions up move

Nifty Bank: 52811

Technical Outlook

Day that was : Nifty Bank index ended the lack lustre session on a flattish note amid consolidation of gains . Index closed at 52811 m down 59 points . PSU banks witnessed some profit taking .

Technical Outlook :

* The index concluded a narrow range session (53000 -52700 ) on a muted note as prices consolidated recent gains near psychological mark of 53000 as prices approached overbought reading after 15 % rally led daily and weekly stochastics above reading of 90 . Thus daily price action formed high wave candle while maintaining higher high -low sequence

* Going forward, we expect index to slow down momentum after strong rally over past three weeks as it approach short term target zone of 53000 -53500 mark . As Index has already gained 15 % over past 16 sessions, a profit booking amid overbought readings cannot be ruled out

* PSU banking stocks have witnessed good profit taking/consolidation over few weeks and could garner buying demand over next few sessions from daily oversold readings

* Meanwhile, we raise the immediate support level for index at 51000 which is current week’s low and also a breakout level post election result outcome

* Price structure : Index has held its rising 52 -week EMA on numerous occasions since COVID and more recently on election outcome day . We believe major bottom has been made at 46077 . We also observe that index is maintaining its higher high -low formation on multiple time frames and remain in steady uptrend . Important point to note is that PSU banks are undergoing healthy higher base formation in the meanwhile while maintaining their positive price structure from medium term perspective

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

SEBI Registration number INZ000183631