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Nifty : 22217

Technical Outlook

Week that was…

Equity benchmarks started the session on a flat note tracking muted global cues. The Nifty settled the Monday’s session at 22122, down 0.4%. The market breadth turned negative with A/D ratio of 1:1.5. Broader market performed in tandem with the benchmark. Sectorally, barring auto, oil & gas, realty all other indices ended in red weighed down by IT, metal, consumption

Technical Outlook

• The index started the session on a flat note and gradually traded in a range amid corrective bias. As a result, daily price action formed a bear candle carrying lower high-low, indicating corrective bias

• Going ahead, we reiterate our positive bias and expect index to gradually head towards 22700 in coming month. Key point to highlight is that, the consolidation breakout supported by faster pace of retracement (as past four week’s decline got retraced in just a single week), signifies robust price structure. We believe, bouts of volatility from hereon owing to global development would offer incremental buying opportunity. Thereby, dips should be capitalized to accumulate quality stocks as strong support is placed at 21800. Our positive bias is further validated by following observations:

• A) Heavyweight Banking index (commanding >33% weight) has resolved higher after forming strong base above 200-day ema

• B) Buoyant global cues as US, Japan indices hit New Highs

• C) The cool off in oil prices and bond yields are likely to act as tailwind

• Structurally, Nifty appears to have approached maturity of seasonal correction in election year (historically, in election year index tends to bottom out in Feb/March followed by preelection rally). The strong rebound from key support highlights elevated buying demand that makes us revise support base at 21800 as it is confluence of:

A. 61.8% retracement of current up move off mid Feb low of 21530 is placed at 21823

B. Last week’s low is placed at 21875 C. 20 days EMA is placed around 21910

Nifty Bank: 46811

Technical Outlook

Week that was :

The Nifty Bank extended breather for fourth session amid lackluster trade . Banks underwent marginal profit taking while HFCs outperformed . Nifty Bank index to close at 46576 , down 235 points or 0 .50 %

Technical Outlook :

• The index commenced Mondays session on a flat note but then traded in red for rest of the session in 46550 - 46800 range amid lack of directional cues . Days price action formed a Doji indicating extended breather near 10 -day ema as index continues to trade in broad range of 47000 -46500 for third session ahead of this weeks monthly expiry

• Going forward, ongoing breather would make index healthier and provide an entry opportunity for target of 47500 levels . Thus we recommend to adopt buy the dips strategy for target of 47500 in coming week which is a value of 80 % retracement of 16 -25th jan decline and bearish gap area

• Since index has surpassed key hurdle and witnessing good breadth we are vising short term support to 45800 levels as it is confluence of :

• A) 50 % retracement of past six session rally (44633 - 47136 ) at 45800

• B) rising 100 -day ema (45731 )

• Structurally, index is undergoing a retracement of November – December rally wherein it gained around 15 % over 9 week period . Index has so far retraced 50 % of the rally over past three weeks and expected to further undergo consolidation .

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