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Nifty : 23623

Technical Outlook

Day that was…

Equity benchmarks kick started the eventful week on a buoyant note tracking exit poll outcome favouring stable government at the center. As a result, Nifty recorded highest ever single day gain of 733 points to settle Monday’s session at 23264. The market breadth remained in favour of advances with A/D ratio of 1.8:1 as broader market performed in tandem with the benchmark. Sectorally, all major indices ended in green led by financials, Oil & Gas, realty, metals

Technical Outlook:

* The index started the week with a positive gap (22530-23338) and logged a fresh All-time high. After initial profit booking, index staged a gradual recovery to settle the session near days high. Consequently, daily price action resulted into small bear candle with long lower shadow carrying positive gap below it, highlighting acceleration of upward momentum on the breach of two weeks range breakout. In the process, India VIX declined 14% to settle the day at 21 as anxiety ahead of General Election outcome settles down

* In line with our view, Nifty resolved higher and now approaching towards our earmarked target of 23400 (as envisaged in Feb-24 special report “Nifty @23400 : Pre-Election rally on the cards…”). The across sector participation backed by improving market breadth makes us confident to reiterate our positive bias and expect Nifty to challenge our target of 23400 in coming sessions. In the process, 22800 would act as key support. Thus, any temporary breather should be capitalised as incremental buying opportunity

* Structurally, key point to highlight is that, since start of CY24, Nifty has not corrected for more than 5% on multiple occasions despite host of negative news. Consequently, Nifty has formed a strong higher base formation at 21800. For the upcoming week, key support is placed at 22800 being confluence of following observations:

* A)61.8% retracement of current up move (22417-23338)

* B) As per change of polarity concept earlier breakout of 22800 would now act as key support

Nifty Bank: 50980

Technical Outlook

Day that was :

The Nifty Bank index posted highest single day gain since 2021 to close at new life highs . PSU bank index rocketed 8 . 6 % while private bank index gained 3 . 6 % , both recording new highs . Nifty Bank index closed at 50980 , up 1996 points or 4 %

Technical Outlook :

* The Bank Nifty index started session with a gap up reacting to exit poll outcome and in the process achieved target of 51000 levels in Mondays session leaving huge unfilled gap at (50092 - 48983 ) indicating prices breaking away from past one month consolidation (49700 -47000 ) and acceleration of uptrend . In the coming session markets are likely to react further to actual Election outcome wherein sustaining above Mondays high of 51000 would lead index further north

* Structurally, index has exhibited strength with Mondays breakout . While minor retracements cannot be rule out, we expect index to maintain its uptrend and eventually head towards 52400 levels in the month of June, with strong support placed at 49500 levels

* Key observation is since January each rising segment has been around 7 % each, while current upleg from 47000 mark is now bigger in magnitude with 9 % gains in just three weeks indicating improving price structure

* PSU banking index has given a breakout from three month consolidation and expected to outperform

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