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Nifty : 22514

Technical Outlook

Week that was… Equity benchmarks outshined global peers to record new highs, led by rate sensitives even as RBI maintained statuesque on policy rates. The Nifty gained 0.8% to settle the week at 22514. Midcap and small cap indices outperformed the benchmark by gaining 4% and 7%, respectively. Sectorally, Mteal, PSU, realty remained at forefront while FMCG took a breather

Technical Outlook

* The index witnessed a rangebound activity throughout the week wherein nifty oscillated in 300 point range aid positive bias. The weekly price action resulted into high wave candle, indicating positive bias amid elevated volatility. In the process, midcap index recorded fresh high supported by faster pace of retracement, highlighting structural improvement

* The breakout from one month consolidation (22525-21710) helped index to clock a fresh all time high of 22619. Going ahead, we reiterate our positive stance and expect Nifty to head towards 23400 by the general election outcome while short term milestone is placed at 22900 in coming weeks. The index is showing resilience despite global volatility signaling pre-election rally is brewing up in tandem with historical election year price-behaviour. Thus, any temporary breather should be capitalized as incremental buying opportunity as strong support is placed at 22100. Our positive bias is further validated by following observations:

* A. The Bank Nifty is expected to resolve out of three months consolidation (48600-44450) that would further strengthen the leadership of BFSI in next leg of up move. As we expect, Bank Nifty to head towards 49800 while strong support is placed at 47500 which we expect to hold

* B. The current up move is backed by broad based participation as Percentage of stocks above 50days ema rebounded strongly from its bearish extreme (20% levels) to current reading of 70%

* C. Midcap index posted faster retracement of five-week corrective phase in three weeks and recorded new highs, indicating continuation of structural uptrend while small cap index is just 2% away from its All time High

* D. Major industrial commodities like Aluminium and Copper are coming out of prolonged base formation., were up 4%-6% last week. This supports bullish stance on Metal

* Sectorally, we remain constructive on BFSI, Capital goods, IT, Auto, Metal

* The sustenance above 50 days EMA highlights inherent strength that makes us revise support base at 22100 as it is confluence of:

* A) 50 days EMA placed at 22250

* B) 50% retracement of current up move (21710-22529), at 22164

Nifty Bank: 48493

Technical Outlook

Week that was : The Nifty Bank index closed at three month highs last week even as RBI maintained its statuesque on interest rates . NiftyBank index closed at 48493 , up 1369 points or 2 . 9 %

Technical Outlook

* The Index gained on four out of five sessions last week and accelerated up move towards second half to close above short term hurdle of 48 k and almost approached life highs . Price action formed a strong bull candle with higher high -low, leading index to post highest weekly close . Private banks and PSU both contributed to gains

* We reiterate our positive stance on index and expect index to breakout of three month consolidation . We therefore raise the target for index to 49800 levels which is projection basis past one month trading range (48000-46200) hence any transitory retracement of recent gains should be used as buying opportunity as we expect index to hold 47500 as strong support

* Structurally, index has undergone healthy consolidation phase since late December 2023 which has set stage for next up move . Within this phase index has maintained its rhythm of forming higher lows near 52 -week ema indicating continuation of structural uptrend

* We are raising immediate support at 47500 as it is confluence of :

* A) 38 . 2 % retracement of recent up move (45828 -48557 )

* B) value of rising 20 -day ema at 47238

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