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Nifty : 21738

Technical Outlook

Day that was…

Equity benchmarks started the week on a buoyant note tracking firm Asian cues. Nifty zoomed 385 points to settle the session at 21738, up 1.8%. The market breadth turned positive with A/D ratio of 1.5:1 broader market performed in tandem with the benchmark. Sectorally, barring FMCG all other indices ended in green led by oil & gas, financials, auto

Technical Outlook

• The index witnessed a gap up opening and gradually inched northward as the day progressed lead by index heavy weight. As a result, daily price action resulted into bullish belt hold line candle carrying strong bull candle carrying higher high-low. Consequently, index logged a breakout from the eight session’s falling trend line, indicating resumption of upward momentum

• We expect Nifty to resolve higher and gradually challenge the All Time High of 22124 in coming weeks. In the process, volatility to remain high owing to Union Budget, US Fed meet and earnings progression. Structurally, with past two week’s 4.5% correction, index is entering budget week on a lighter note. Thus, accumulating quality stocks on dips would be the fruitful strategy to adopt. Our positive bias is further validated by following observations:

• A) Bank Nifty has approached key support threshold of 200 days EMA amid oversold conditions, indicating impending pullback which would fuel the pullback rally in Nifty (as Bank Nifty carries 35% weightage in Nifty)

• B) The rejuvenation of upward momentum in global market signifies firm global cues that would provide impetus to domestic market

• The formation of lower high-low on the weekly chart signifies pause in upward momentum that would makes us revise support base at 20800 as its is confluence of: A. Price parity of last leg of decline 22124-21285 projected from Tuesday’s high of 21750 B. 38.2% retracement of past two months up move 18838- 22124

Nifty Bank: 45442

Technical Outlook

Day that was :

The Nifty Bank posed a decent pull back on Monday to start the week on a positive note .Nifty Bank index closed at 45442 , up 576 points or 1 . 3 %

Technical Outlook :

• The index started the session with a gap up action and closed above previous session high for the first time in eight sessions indicating follow through strength after buying demand emerged near 200 day ema and key support zone of 44300 -44000 levels as prices approached weekly stochastics of 21 and daily reading of 12 indicating oversold nature of prices

• Over past two session index has posed 2 . 7 % pull back, which is similar to earlier two instances in ongoing corrective phase . Strength above Mondays high (45660 ) would make current pullback larger in magnitude and would indicate further rally towards last week high of 46500 that also coincides with 50 % retracement of past one month decline (48636 -44429 )

• Meanwhile, we expect index to hold key support zone of 44300 -44000 in current Budget week despite volatility as it is confluence of :

• rising 52 -week ema (44122 )

• 61 . 8 % retracement of rally (42105 -48636 ) at 44600 • Equality of current decline with July -Oct 2023 decline ( 9 % ) at 44250

• Structurally, index is undergoing a retracement of November – December rally wherein it gained around 15 % over 9 week period . Index has so far retraced 50 % of the rally over past three weeks and expected to further undergo consolidation while PSU banks are exhibiting strength and likely to outperform

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