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Nifty : 19783

Technical Outlook

• The index witnessed a gap up opening (19694-19770) and traded above the same throughout the session. The daily price action resulted into small bull candle carrying upper shadow, indicating positive bias amid stock specific action Meanwhile, Nifty midcap and small cap indices recorded yet another lifetime highs

• The index is trading in a narrow range of 200 points and confined within Thursday’s trading range of 19875-19627, indicating breather after >1000 points rally seen over past three weeks. We believe, ongoing consolidation would make market healthy and pave the way for next leg of up move towards psychological mark of 20000 in coming weeks as it is 80% retracement of Sept-Oct decline (20222- 18838), placed at 19945. Hence, buying dips would be the prudent strategy to adopt wherein strong support is placed at 19400 which we expect to hold. Our positive bias is further validated by following observations:

• A) Revived buying demand in the broader market backed by improving market breadth signifies inherent strength

• B) Crude Oil: The sustenance below October low signifies weakness in Crude that would in turn act as tailwind for equity

• C) Further dip in dollar index along with cool off in global yields would provide impetus for acceleration of up move

• The sequence of higher lows signifies buying demand at elevated support base that makes us revise the support base upward at 19400 as it is 50% retracement of past two weeks rally (18838-19875) coincided with 100 days EMA placed at 19347 and past two week’s low of 19330

Nifty Bank: 43689

Technical Outlook

• The Daily price action formed a small ranged high wave candle with higher high -low indicating continuation of supportive efforts in the vicinity of 200 -day ema (43300 )

• Going forward, we expect index to hol d 43200 levels and inch higher towards 44500 levels . Ongoing consolidation in 43200 -44500 zone would set the stage for next leg of upmove

• Key short term support is placed at 43200 which we expect to hold, as it is a confluence of :

• 50 % retracement of past two weeks up move (42105 -44056 ) placed at 43080

• value of rising 200 days ema is placed at 43272

• 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 rally by 50 % over 17 week correction indicating shallow nature of retracement . Since covid lows index held 52 - week ema (42700 ) on three occasions, followed by new high in each case in subsequent quarters . We expect same rhythm to be maintained

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