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Nifty : 22356

Technical Outlook

* The index started the session in a flat note and witnessed a range bound activity amid stock specific action. As a result, daily price action formed a doji like candle, indicating breather near life highs

• Going ahead, we maintain our positive bias and expect Nifty to head towards 22700 in coming week’s wherein large caps would relatively outperform the broader market as ratio of Nifty vs Nifty 500 has bottomed out. Structurally, the index is taking breather after witnessing faster retracement, indicating robust price structure. Thus, we advise to utilize dips as an incremental buying opportunity since immediate support is placed at 22000

• Empirically, in General election year, Nifty has a tendency to bottom out in Feb-March, followed decent rally towards General election outcome in each of seven instances over past three decades. Thereby we expect Nifty to maintain the same rhythm and head towards 23400 by June 2024. Hence, bouts of volatility ahead of general election should be capitalized as buying opportunity from medium term perspective. Our positive bias is further validated by following observations:

• A) The Bank Nifty has witnessed a follow through strength post faster pace of retracement wherein it retraced six sessions decline in just a single session highlighting robust price structure

• B) Structural improvement in US, Europe, Japan equity markets validates strong global trend

• C) The cool off in oil prices and Dollar index are likely to act as tailwind

• Structurally, formation of higher high-low on the weekly chart signifies elevated buying demand that makes us to revise support base at 22000 as it is confluence of: A. 80% retracement of current up move (21860-22440) is placed at 21976 B. 20 days EMA is placed at 22067

Nifty Bank: 47581

Technical Outlook

• The Index started the session on subdued note, however gained strength after first hour of trading . Large PSU banks led the gains initially later supported by private banks . Price action formed a bull candle with higher high and low indicating continuation of bullish momentum after couple of days breather

• We reiterate our positive stance on index and expect index to gradually head towards its life highs of 48600 levels in March 2024 . We recommend using declines as an incremental buying opportunity

• Meanwhile, we have upgraded short term support to 46500 levels which is confluence of 61 . 8 % retracement of past five session rally that coincides with rising 50 - day ema

• Structurally it is worth noting that each time Index has a tendency to challenge and surpass life highs after a base formation near rising 52 -week EMA . In current context index has already formed a strong base near 44600 levels . We expect index to maintain its rhythm and challenge life highs of 48636 in March 2024

• Meanwhile, PSU bank index has hit fresh life high and expected to outperform on relative basis

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