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Nifty : 20938

Technical Outlook

• The index started the session on a positive note and traded in 100 points range throughout the day. The daily price action formed a doji like candle carrying higher high-low, indicating acceleration of upward momentum

• The elongation of rallies followed by shallow retracement signifies robust price structure that makes us believe Nifty to head towards 21000 in coming sessions as it is price parity of Jun-Dec 2022 rally (15183-18887) projected from Mar-23 low of 16828. Key point to highlight is that, over past six sessions Nifty has rallied >1000 points which hauled daily and weekly stochastic oscillator in overbought territory, indicating possibility of temporary breather can not be ruled out. However, such breather should not be construed as negative instead dips should be utilized as incremental buying opportunity as immediate support is placed at 20300. Our positive bias is further validated by following observations:

• A) BFSI sector which carries 35% weightage in the Nifty has witnessed faster pace of retracement as it retraced 14 weeks decline in just six weeks, indicating rejuvenation of upward momentum

• B) Percentage of stocks above 50day ema jumped from 25% at end of October to ~85% as on date indicating broad based participation in current breakout

• C) The persistent FII’s inflow would help accelerate rally along with robust DII flows

• D) Brent prices remained subdues while decline in Dollar index to 103 is supportive of inflows

• The formation of higher peak and trough signifies elevated buying demand that makes us confident to revise support base at 20300 as its is confluence of 50% retracement of current leg of up move (19670-20962) coincided with Monday’s gap area (20268-20508)

Nifty Bank: 46834

Technical Outlook

• The price action formed a bear candle indicating a breather as marginal profit taking emerged near 47300 mark after 3500 points rally in just five sessions led daily stochastics to overbought reading of 94 levels . Index however maintained higher low on daily chart indicating continuation of positive bias . A short term breather or consolidation would provide a buying opportunity, hence buy the dips . WE expect PSU banks to relatively outperform

• We expect positive momentum to continue and NiftyBank to head towards 47375 levels as it is 123 . 6 % retracement of July -October corrective phase (46369 - 42105 ) while immediate strong support is now being revised at 45900 being38 . 2 % retracement of past five session rally

• Structurally, index posted faster retracement of entire July -October decline in just four weeks highlighting robust price structure . Further participation of both private/public sector banks make the rally more dependable in terms of having further legs . We expect PSU banks to relatively outperform over medium term as the PSU bank index has given a multi year breakout

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