The Index started the week on a positive note - ICICI Direct
Nifty :25471
Technical Outlook Source: Bloomberg, Spider, ICICI Direct Research ICICI Securities Ltd. | Retail Equity Research Week that was.. Indian equity benchmark pared some of its last week’s gains amid mounting fear of AI led disruption. Nifty settled the week at 25471 with a cut of 0.90%. However, the broader market defied the global trend as Nifty midcap remained unchanged while small cap gained 0.5%. Sectorally, Defense, PSU Banks, auto remained at forefront while IT witnessed biggest single week decline since April 2024 Technical Outlook:
• The Index started the week on a positive note, however profit booking amid global volatility over the last three days pulled the index lower. As a result, the weekly price action formed an inside bar, indicating breather after last week’s sharp uptrend.
• We expect index to consolidate in the broader range of 26000- 25200 wherein focus should be on accumulating beneficiaries of trade deal of India with US & European Union. Index is undergoing slower pace of retracement wherein over past eight sessions it merely retraced 50% of two days sharp up move (24572-26340). Such a healthy retracement is providing launchpad to challenge All time high (26350) and open the door for directional trend in coming weeks.
• On the broader market front, Nifty midcap index has rebounded from 52 weeks EMA which has been held firm since past nine months while small cap index witnessed sharp pullback from lower band of six months falling channel. The improving market breadth would result into broadening of the ongoing rally.
• Market breadth has been witnessing improvement, as the percentage of stocks trading above their 50 days SMA has bounced from bearish extremes of 15% to 42% levels, while percentage of stocks above 200-day SMA within the Nifty 500 universe enhanced to 38%. Historically, such contractions in breadth have preceded durable market bottoms, with extreme bearish readings near 15%.
• Sectorally, Since CY-06, on four occasions IT index has witnessed a maximum price wise correction of 34% and time wise correction of 6-7 quarters. Post such phases, the index has typically made new highs. With current week’s sharp decline, it has completed 30% correction. Thereby focus should be on accumulating quality IT stocks in a staggered manner as it approaches maturity of price and time wise maturity
Key Monitorables:
• Brent Crude: Once again retreated from key hurdle of $70-72 range. Only a decisive close above $72 would fuel the momentum for next leg of up move Intraday Rational
• Trend- Lower high-low pattern for three consecutive sessions
• Levels- Buy around 61.8% retracement of February upmove(24758-26320)
Technical Outlook
Week that was: Bank Nifty ended the week on a flat note at 60186, up 0.10%. The Nifty PSU Bank has relatively outperformed the benchmark and clocked a fresh All-time high and closed up 3%.
Technical Outlook:
• Index started the week on a positive gap-up and oscillated within previous session range. The weekly price action formed inside bar, indicating healthy consolidation post marking fresh All-time high in previous week.
• Key point to highlight is that post ~4000 points rally last week index has undergone a healthy retracement near psychological level of 60000 coinciding with 38.2% retracement of its recent upmove (57,829-61,764), indicating healthy consolidation. This structural strength reinforces our bullish bias and supports maintaining a positive outlook going forward. We expect Index to gradually resolve higher and challenge its prior swing high of 61800 levels in coming weeks.
• On a broader perspective Index has staged a strong rebound from its previous resistance, now acting as support(57628) in line with the change-of-polarity principle, indicating resumption of uptrend. Any corrective declines from current levels should be viewed as buying opportunities as strong demand zone is identified near 59,300, being 50-day EMA and 61.8% retracement of the current up move (57,783-61,674)
• Meanwhile, the Nifty PSU Bank Index clocked a fresh All time high outperforming the benchmark, reinforcing near-term bullish momentum. Going forward, the index is expected to advance toward the 9,600 zone, corresponding to the measured range breakout of the 8,702–9,175 band
Intraday Rational:
• Trend- In healthy consolidation phase after sharp ~4000 points rally
• Levels - Buy around 61.8% retracement of recent upmove(58151- 61300).
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