IGI Logo

Nifty : 23537 

Technical Outlook 

Day that was…

Equity benchmarks recovered from early losses to close the session on positive note as stock specific action prevailed. Nifty midcap index and Next50largaps outperformed with gains of 0.3% and 0.7% each, thus outperforming Nifty. Sectorally, Auto and FMCG indices gained ~0.8% each

Technical Outlook:

* The index started the session on softer note , however buying demand in large cap banking stocks at lower level helped index to recoup the losses and form a small bull candle taking support around 10-day ema. It however maintained lower high-low indicating breather after recent rally

* The continuous sectoral rotation backed by improving market breadth signifies inherent strength that makes us reiterate our positive stance and expect Nifty to gradually head towards 23800 in coming weeks, while strong support exist at 23000 mark

* We believe, index is undergoing time-wise correction after 11% rally (Election Day outcome low) which would make market healthy and pave the way for next leg of up move. Thus, extended breather from hereon should be capitalized as incremental buying opportunity as strong support is placed at 23000. Our positive bias is further validated by following observations: a. Revived traction in Bank Nifty would provide impetus for Nifty to resolve higher as Bank Nifty carries ~35% weightage in Nifty b. Robust price structure backed by improving market breadth highlights strong market internals. Market breadth has shown renewed optimism as stocks above 50-day ema has improvised from 51% just before elections to 84% c. 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 retain support base at 23000 as it is 20 days EMA

Nifty Bank: 51703

Technical Outlook

Day that was

Nifty Bank index eked out marginal gains to start the week on positive note helped by buying demand in large banks at lower levels . Index closed at 51703 , up 43 points

Technical Outlook :

* The index commenced the session on a negative note however intra day dips were bought into leading index to recover over 400 points from days low to close in green . Price action thus formed a small bull candle, however maintained lower high -low indicating breather after strong rally of pat week, as past twelve session’s 13 % rally led daily stochastics to overbought readings of 89 levels

* Going forward, we expect index to gradually head towards 53000 mark where current rally from Election outcome low would equate with previous two major rallies since October 2023 . However, we expect journey to 53000 to be in a non - linear fashion due to overbought status of prices and volatility around monthly expiry . However, given the strength in ongoing trend, expect dips to attract buying demand with strong support at 50400 levels . Hence, retracement of rally should be considered as transitory correction and to be used as buying opportunity

* Strong support for coming week is placed at 50400 levels which is a low of last Wednesdays strong bull candle that coincides with 61 . 8 % retracement of last week’s rally

* 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 past two major rallies since October 2023 has measured 15 % before any sizeable correction takes place . We expect index to maintain rhythm and head towards 53000 levels

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

SEBI Registration number INZ000183631