The index witnessed a range bound activity wherein Nifty oscillated by merely 200 points -ICICI Direct
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Nifty : 19795
Technical Outlook
• The index witnessed a range bound activity where in Nifty oscillated by merely 200 points range throughout the week. As a result, weekly price action formed a small bull candle carrying higher low, indicating continuation of upward momentum
• In the upcoming truncated week, we expect index to gradually head towards psychological mark of 20000 as it is 80% retracement of Sept-Oct decline (20222-18838), placed at 19945. In the process, volatility to remain high tracking monthly expiry session coupled with state elections verdict which will weigh on market sentiments. Hence, temporary cool off should be utilized as incremental buying opportunity wherein strong support is placed at 19400 which we expect to hold. Following are the key monitorable for the upcoming week:
• A) Constant improvement in the market breadth signifies strength in the broader market
• B) Declining brent prices, yields along with positive global setup and strong breadth internals support the bullish chart setup
• C) Post recent decline in bond yields and inflation, US equity majors have formed bullish reversal patterns on medium term charts. Positive global setup would also help domestic indices
• Sectorally, IT, PSU, Pharma, Auto are expected to outperform while BFSI and metals provide favourable risk-reward setup
• On the stock front, in large cap we prefer Axis Bank, Asian Paint Tata Motors, Bajaj Auto, Dr Reddy, HAL, Hindalco while in midcaps Cochin Shipyard , Coforge, NMDC, Indo Count Ltd, Granules India, Exide India, Data patterns. Ashok Leyland are looking good
• The sequence of higher lows signifies buying demand at elevated support base that makes us retain support base upward at 19400 as it is 50% retracement of past two weeks rally (18838-19875) coincided with 100 days EMA placed at 19314 and past two week’s low of 19373
Nifty Bank: 43769
Technical Outlook
• The Weekly price action formed hammer like candle with lower shadow indicating support at key support of 43200 which is coincidence of mid -November lows and 200 day ema Index has been broadly consolidating in 43200 -44500 over past 12 sessions undergoing higher base formation
• Going forward, we expect index to hold 43200 levels and inch higher towards 44500 levels in upcoming monthly expiry week . Ongoing consolidation in 43200 - 44500 zone would set the stage for next leg of upmove , hence use dips as buying opportunity
• 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, key observation has been that, 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 . Meanwhile, 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 .
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