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Nifty : 21929

Technical Outlook

Day that was…

Equity benchmarks edged higher and settled Tuesday's session at 21929, up 158 points or 0.7%. The market breadth turned positive with A/D ratio of 1.8:1 as broader market relatively outperformed. Sectorally, IT, auto, metal remained at forefront while financials took a breather

Technical Outlook

• The index started the session on a subdued note and gradually inched northward as the day progressed. Consequently, index recovered lost ground and formed a bull candle, indicating extended breather amid stock specific action

• The index is undergoing higher base formation after retreating from All Time High. We believe, ongoing consolidation would make market healthy and pave the way for next leg of up move towards 22200 in the coming week. In the process, volatility would prevail amid progression of earning season and global development. Thus, accumulating quality stocks on dips would be prudent strategy as we expect Nifty to hold key support of 21400. Our positive bias is further validated by followingobservations :A) Bank Nifty is forming higher base above 52 weeks EMA while IT index resumed uptrend post 3 weeks hiatus. Revived traction in both these indices would fuel lead to extension of upward momentum.

• B) The current up move is backed by improvement in market breadth as currently 70% stock are trading above their 50 days EMA compared to last week’s reading of 64%

• C) The cool off in Bond yield would provide impetus to global equities

• The index snapped two weeks breather and formed a higher high-low, indicating rejuvenation of upward momentum that makes us revise support base at 21400 as it is confluence of: A. 50% retracement of mid Dec-Jan rally (20508-22124) B. Last week’s low is placed at 21430

Nifty Bank: 45691

Technical Outlook

Day that was :

The Nifty Bank extended losing streak for third session in a row amid lack of directional bias and ahead of RBI policy meeting . Nifty PSU bank index closed flat to maintain its relative outperformance . Nifty Bank index closed at 45691 , down 135 points or 0 . 3 %

Technical Outlook :

• The index commenced the session on a muted note and then traded choppy in 45800 -45600 range for rest of the session . It however maintained lower high -low formation on daily chart

• Going forward, we expect index to hold short term support of 44800 and form a higher bottom followed by a gradual recovery towards 47500 which is a value of falling gap area of 17th Jan 2024 . Meanwhile, earnings, global cues and upcoming RBI monetary policy would have a bearing on sentiments . PSU banks, HFCs and gold finance companies are expected to relatively outperform .

• We revise short term support to 44800 as it is confluence of :

• 80 % retracement of past five day pullback (44921 ) • Last weeks low at 45071

• rising 200-week ema (44627 )

• 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 while PSU banks are exhibiting strength and likely to outperform

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