IGI Logo

Nifty : 19523

Technical Outlook

• The index started the week with a positive gap and underwent rangebound activity wherein Nifty oscillated by 150 points range during the week. Consequently, weekly price action formed a small bull candle carrying higher high-low, indicating continuation of positive momentum. Defying the ongoing volatility, Nifty small cap index clocked a fresh All Time High, highlighting relative strength

• In the upcoming truncated week, we expect index to trade with a positive bias and gradually head towards immediate milestone of 19700 in the couple of weeks as it is 61.8% retracement of SepOct decline (20222-18838). In the process, stock specific action would prevail as we approach the fag end of the earning season amid lower participation in festive season. Hence, buy on dips would be the prudent strategy to adopt as strong support is placed at 19200. Our positive bias is further validated by following observations:

• A) The improvement of market breadth signifies broader market participation as currently 58% stock of Nifty 500 are trading above 50 days EMA compared to October reading of 24%

• B) The breach of October low in Brent crude oil would provide impetus to equity market

• C) Further cool off in global and domestic yields and reversal in dollar index would be key catalyst for acceleration of up move

• Sectorally, BFSI, Auto, Infra, PSU to outperform in the coming week amid ongoing global volatility

• On the stock front, in large cap we prefer Axis Bank, SBI, Tata Motors, Sun Pharma, GAIL, NTPC while in midcaps Canara Bank, PFC, TCI, Sonata Software, HAL, NMDC, Spandana Sphoorty financial are looking good

• The formation of higher low signifies supportive efforts at elevated support base that makes us revise the support base upward at 19200 as it is 50% retracement of past two weeks rally (18838-19464)

Nifty Bank: 43996

Technical Outlook

• The price action formed small candle with a gap up action and approached short term target around 44000 levels . Index continued its higher high -low indicating continuation of positive momentum .

• Going forward, sustainability above 44000 would lead to further acceleration of upward momentum in gradual manner towards 44700 as it is 61 . 8 % retracement of entire down move (46310 -42105), else consolidation in 44000 -42800 to continue .

• Key short term support is placed at 42800 which we expect to hold in case of volatility, as it is a confluence of :

• Rising gap of 2 nd November at 42700 • 61 . 8 % retracement of past eight sessions gains (42105 -43800 ) placed at 42750

• value of rising 52 -week ema which has been held on couple of occasions since CY2020 currently at 42800 (transitory breach usually is sign of capitulation)

• Structurally, Index is in the process of undergoing a retracement of March to July rally while pricing in various negatives in the process . So far index retraced 18 week rall y by 50 % over 15 week correction indicating shallow nature of retracement . Since covid lows index held 52 - week ema on three occasions, followed by new high in each case in subsequent quarters

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

SEBI Registration number INZ000183631