IGI Logo

Nifty : 20103

Technical Outlook

* The index started the weekly expiry session on a positive note and recorded fresh All Time High of 20167. The daily price action resulted into a high wave candle, indicating continuation of positive bias amid stock specific action

• The formation of higher peak and trough on the weekly chart signifies elevated buying demand that makes us confident to reiterate our positive bias and expect Nifty to gradually head towards revised target upward at 20400 in coming weeks. Key point to highlight is that, the index has retraced past 29 sessions decline (19991-19223) in just seven sessions. Hence, any temporary breather after faster pace of retracement would make market healthy and pave the way for next leg of up move. Thus, buying on dips would remain the prudent strategy to adopt as immediate support is placed at 19600.

* On the broader market front, it is important to highlight is that, since April 2023 on multiple occasions Nifty midcap and small cap indices have managed to hold the 20 days EMA since April 2023. Both indices have maintained the same rhythm by finding supportive efforts from 20 days EMA. Therefore, going head 20 day EMA (placed at 39500) would be the key monitorable as holding above the same would keep pullback option open else extended correction.

* Structurally, we are in a secular bull market depicted by the acceleration of upward momentum in broader market space post breakout from 5 years consolidation of Nifty Midcap vs Nifty ratio line. In a secular bull market secondary correction is a common phenomenon wherein historically midcap index corrected to the tune of 8-10%. Therefore, ongoing correction should be utilised to construct a quality midcap portfolio from medium term perspective.

* The formation of higher peak an trough supported across sector participation makes us confident to revise support base at 19600 as it is confluence of:

* a) 50% retracement of current up move (19223-20008), at 19615

* b) Earlier resistance of 19600 will now act as support as per change of polarity concept

* c) 20 days EMA is placed at 19684 

Nifty Bank: 46000

Technical Outlook

* The price action for the day formed a small high wave candle indicating breather after Wednesdays strong gains in the vicinity of life highs

* Going forward, we expect index to challenge life highs and head towards 46600 over next few weeks where current rally from august lows of 43600 would find equality with June -July rall y (43345 -46369 ) . Intermittent dips would offer buying opportunity with key support at current week highs at 45200 -45000

* Our view is backed by following key observations

* Key immediate support is at current week low of 45200 that coincides with 20 day ema placed at 45000

* PSU banks index has given a breakout from decadal range indicating structural turnaround and expected to outperform

• Private banks with significant weightage are oversold and at key supports . Expect them to bounce back which will lift banking index higher

• PSU Banking index is expected to continue its relative outperformance as index has recently concluded breakout from multi year highs

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

SEBI Registration number INZ000183631