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Nifty : 22124

Technical Outlook

Day that was…

Equity benchmarks regained upward momentum and settled Wednesday’s session on a positive note. The Nifty gained 119 points to settle the session at 22124. The market breadth turned negative with A/D ratio of 1:1.3. Sectorally, financials, auto, Oil & Gas, Consumption outperformed while IT, PSU Banks relatively underperformed

Technical Outlook

* The index started the session on a positive note and gradually inched upward as the day progressed. The daily price action formed a bull candle carrying higher high-low, indicating positive bias

* Going ahead, we expect index to endure its northbound journey and gradually head towards life highs of 22500 in coming month. In the process, bouts of volatility owing to global development would offer incremental buying opportunity. Thus, buying on dips would be the prudent strategy to adopt as strong support is placed at 21700 which we expect to hold. Our positive bias is further validated by following observations:

* A) BankNifty has undergone healthy retracement wherein it retraced 50% of preceding four week’s up move.

* B) Since CY18, on nine out of eleven occasions mean reversion towards 50 days EMA along with market breadth approaching bearish extremes, offered fresh entry opportunity. Even in current scenario, % of stocks above 50 days SMA of Nifty 500 universe bounced from 20 levels (oversold zone)

* C) Positive structure in global peers bodes well for positive momentum in the domestic market

* Empirically over two decades, bull market corrections in Nifty Midcap and small cap indices tend to be average 12% -15% respectively. In current context these indices have corrected 9% and 16% already. We believe much of price correction is behind us and expect these indices to undergo a base formation over next few weeks. Post recent correction many quality companies have approached their key support. Investors should focus accumulating quality stocks from long term perspective

* Structurally, since Nov-23 index has been sustaining well above 50 days EMA, highlighting inherent strength that makes us reiterate support base at 21700 as it is confluence of:

* A) 61.8% retracement of Jan-Mar rally (21137-22526), at 21668

* B) Last week’s low is placed at 21710

Nifty Bank: 46786

Technical Outlook

Day that was :

The Nifty Bank index gained on monthly expiry session recouping Tuesdays’ losses . Nifty Bank index closed at 46786 , up 186 points or 0 . 4 % . Private banks outperformed public peers on relative basis

Technical Outlook

* The Index commenced session on a positive note nad then traded in 46750 -46900 range for rest of the session amid monthly expiry adjustments . In the process price action formed bull candle as supportive efforts emerged near rising 50 -day ema (46600 )

* BankNifty has shown resilience in the face of recent volatility as it has undergone healthy retracement wherein it retraced 50 % of preceding four week’s up move and closed above 20 days EMA, suggesting revival of upward momentum that makes us believe index would head towards 48000 in coming month wherein strong support is placed at 46000

* Key support for Bank Nifty is placed around 46000 mark which we expect to hold as it is confluence of rising 100 - day ema and key trendline connecting January and Feb swing lows

* Structurally, index is undergoing a broader consolidation phase since late December 2023 which we expect to set stage for next up move . Within this phase index has maintained its rhythm of forming higher lows near 52 - week ema indicating continuation of structural uptrend .

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