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Nifty : 19812

Technical Outlook

• The index witnessed a volatile session wherein Nifty oscillated by ~300 points wherein fag end buying demand helped index to recoup initial losses. Consequently, daily price action resulted into small bull candle with lower shadow, indicating elevated buying demand.

• The index is trading in a narrow range of 200 points over past four sessions wherein stock specific action prevailed amid positive bias, indicating breather after >1000 points rally seen over past three weeks. We believe, ongoing consolidation would make market healthy and pave the way for next leg of up move towards psychological mark of 20000 in coming weeks as it is 80% retracement of SeptOct decline (20222-18838), placed at 19945. Hence, buying dips would be the prudent strategy to adopt wherein strong support is placed at 19400 which we expect to hold. Our positive bias is further validated by following observations:

• A) Revived buying demand in the broader market backed by improving market breadth signifies inherent strength

• B) Crude Oil: The sustenance below October low signifies weakness in Crude that would in turn act as tailwind for equity

• C) Further dip in dollar index along with cool off in global yields would provide impetus for acceleration of up move

• The sequence of higher lows signifies buying demand at elevated support base that makes us revise the support base upward at 19400 as it is 50% retracement of past two weeks rally (18838-19875) coincided with 100 days EMA placed at 19347 and past two week’s low of 19330

Nifty Bank: 43450

Technical Outlook

• The Daily price action formed a bear candle with lower shadow indicating supportive efforts near 200 -day ema (43300 )

• Going forward, we expect index to hol d 43200 levels and inch higher towards 44500 levels . Ongoing consolidation in 43200 -44500 zone would set the stage for next leg of upmove

• 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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