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Nifty : 23558

Technical Outlook

Week that was…

Equity benchmarks started the truncated week on a buoyant note and clocked a fresh All Time High, tracking firm global cues. The Nifty gained 92 points to settle the session at 23558. Broader market outperformed the benchmark as Nifty Small cap gained 1%. Sectorally, financials, consumption, realty while pharma, metal extended breather

Technical Outlook

* The index started the week with a positive gap and traded in a range throughout the session amid positive bias. The daily price action formed a small bear candle carrying higher highlow, indicating continuance of positive momentum. Boarder market relatively outperformed and endured its record setting spree

* Going ahead, we expect index to endure its northbound journey and gradually head towards 23800 in coming weeks. In the process, temporary breather after 11% rally (from June low) cannot be ruled out. However, such breather should not be construed as negative instead capitalised it as incremental buying opportunity as strong support is placed at 23000. In the process, stock specific themes are expected to outperform. With market now focusing on government’s 100-day agenda and budgetary allocations, we expect outperformance in BFSI, PSU, Capital Goods & Infra, Defense, Power, auto. Our positive bias is further validated by following observations:

a. Market breadth has shown renewed optimism as stocks above 50-day ema has improvised from 51% just before elections to 88% this week

b. The market fear gauge India VIX has plunged 60% from last week’s high as anxiety around the election event settles down

c. Buoyancy in US markets bodes well for domestic market as it has direct correlation with the developed market

* Structurally, the formation of higher peak and trough signifies elevated buying demand that makes us revise support base at 23000 as it is 38.2% retracement of current up move (21281- 23579) coincided with 20 days EMA

Nifty Bank: 50440

Technical Outlook

Week that was :

Nifty Bank index closed higher on Tuesday led by private banks . Nifty Bank index closed at 50440 up 438 points or 0 .88 %

Technical Outlook

* The price action for the day formed sizeable bull candle as index resolved higher from five day breather, indicating continuation of uptrend with higher high -low formation

* Going forward, we expect index to challenge its life highs of 51133 in coming week . Therefore, intermediate dips if any would remain a buying opportunity

* In the process, immediate support is now being raised to last week lows of 49500 levels which also coincides with rising 20 - day ema placed at 49317

* PSU Bank index continues to undergo healthy consolidation in a narrow range amid multiple banks undergoing fund raise . Price structure however remains positive and prospects of lower bond yields may trigger further buying demand for PSU banking stocks in coming months

* As index has already undergone 10 % correction on election day, we believe major bottom has already been formed and index is expected to head higher with rising peak and trough formation in coming weeks

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