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Nifty : 21711

Technical Outlook

Week that was…

Equity benchmark started the CY24 on a flat note amid muted global cues. The Nifty lost 26 points to settle the week at 21711. Broader market outperformed as Nifty Midcap and Small cap concluded the week with ~2% gains. Sectorally, Realty , pharma, Oil & Gas, PSU outperformed while IT, metal, auto relatively underperformed

Technical Outlook

• The index witnessed a range bound activity and concluded first week of CY24 on a flat note. The weekly price action formed a doji like candle, indicating breather amid elevated volatility ahead of Q3 earning season

• We believe, short lived corrections followed by elongated rallies signifies robust price structure that makes us reiterate our positive bias of Nifty heading towards 22000 in coming weeks. In the process, bouts of volatility would prevail amid onset of Q3 earning season. Key point to highlight since end of Oct-23 is that the intermediate corrections have been limited to the tune of 3% while time wise index has not given negative close for more than 2-3 consecutive sessions, highlighting inherent strength. Thus, any breather should be capitalized to accumulate quality stocks as we expect Nifty to hold the key support threshold of 21300. Our positive bias is further validated by following observations:

• A) The major sectoral indices are trading above their short term moving average, indicating strength of broader market

• B) Market breadth continues to remain strong as percentage of stocks above 50days ema remain at 87%

• B) Global equity markets are at cusp of challenging their past couple of year highs and expected to do well in coming weeks.

• C) Falling crude along with declining yields would act as tailwinds

• Sectorally, BFSI, IT, Pharma, Metals are expected to outperform

• On the stock front, in large cap we prefer Reliance, Axis bank, SBI, TCS, ABB, HUL, Divis lab, ONGC, United Spirits, Tata Power while in midcaps Affle, Abbott India, Central Bank, AB capital, bluedart, Century Ply, CIE india, RPG life are looking good

• The formation of higher peak and trough supported by across sector participation makes us confident to retain support base at 21300 as its is confluence of 61.8% retracement of recent up move (20977-21834) coincided with 20 days EMA placed at 21297 and past two week’s low of 21329

Nifty Bank: 48159

Technical Outlook

Week that was :

The Nifty Bank index ended the week on a flattis h note to settle at 48159 , down 133 points for the week . Nifty PSU banks outperformed with 2 . % gains for the week while Nifty private banks index closed flat

Technical Outlook :

• The price action for the week formed an inside bar candle as prices consolidated in the range of previous week’s high -low (48636 -47411 ) . Index however maintained higher high -low formation for sixth week in a row indicating continuation of positive bias

• We expect index to gradually head towards 49000 levels in coming weeks . However, taking note of overbought readings (weekly stochastics of 87 ) we do not rule out marginal profit taking, hence recommend to adopt buy on dips strategy

• Meanwhile, we revise short term support to 47400 being last two week’s lows that coincide with rising 20 -day ema (47517 )

• Structurally, index formed a higher bottom after strong breakout above 46300 levels in faster time highlighting robust price structure and elevated buying demand . Further, participation of both private/public sector banks make the rally more dependable with large caps being in focus

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