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Nifty : 19407

Technical Outlook

• The index witnessed a rangebound activity wherein Nifty oscillated by 100 points range. The daily price action formed a doji like candle, indicating rise in volatility amid stock specific action. In the process, Nifty small cap index clocked a fresh All Time High

• We expect index to trade with a positive bias and gradually head towards 19600 in the coming weeks as it is placement of resistance trend line drawn adjoining Sep-Oct highs. Thus, bouts of volatility should be capitalized as incremental buying opportunity amid progression of earning season. Our positive bias is further validated by following observations:

• A) Bank Nifty (which carries 36% weightage in Nifty) has maintained the rhythm of witnessing buying demand from 52 weeks EMA. In each of past three occasions post COVID lows, Bank Nifty rallied back to highs after testing 52-week EMA. Thus, we expect banking to lead recovery in coming weeks.

• B) Advance/Decline ratio has reverted above 1.1 during current week after recording bearish extreme of 0.27 last week indicating broad based recovery

• C) Further cool off in global and domestic yields and reversal in dollar index would be key catalyst for acceleration of up move

• The formation of higher low signifies supportive efforts at elevated support base that makes us revise the support base upward at 19000 as it is confluence of 200 days EMA coincided with last week’s low of 18940

Nifty Bank: 43738

Technical Outlook

• The price action formed bull candle with higher high - lower low indicating buying demand emerging amid intraday volatility . Meanwhile index remains on course towards its short term milestone of 44000

• Going forward, we expect index to continue its upward trajectory in a gradual manner towards 44000 in coming week which is value of 50 and 100 dema that coincides with 80 % retracement of preceding two week decline Meanwhile we revise short term support to 42800 in case of any volatility . Key support is placed at 42800 levels as it is a confluence of :

• Rising gap of 2 nd November at 42700

• 61 . 8 % retracement of past eight sessions gains (42105 -43800 ) placed at 42750

• value of rising 52 -week ema which has been held on couple of occasions since CY2020 currently at 42800 (transitory breach usually is sign of capitulation)

• 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 rall y by 50 % over 15 week correction indicating shallow nature of retracement . Since covid lows index held 52 - week ema on three occasions, followed by new high in each case in subsequent quarters

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