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Nifty : 21622

Technical Outlook

 Week that was… Indian equity benchmarks underwent profit booking during last week amid muted global cues and selling in heavyweight private bank amid earnings disappointment. Nifty declined 1.2% for the week led by 4% cut in Bank Nifty while Nifty Midcap index managed to close up 0.5%. In the meantime, PSU, Oil & Gas, IT sectors relatively outperformed during the week

Technical Outlook

• Index witnessed a roller-coaster move wherein index witnessed >1450 points move during the week. The weekly price action resulted into a bear candle (despite elevated volatility index maintained the rhythm of closing above previous week’s low over 12th consecutive week), indicating extended breather amid progression of Q3 earning season

• Going ahead, we expect prolongation of consolidation with a stock specific action that would help index to form a higher base after 17% rally seen over past two months. Eventually we expect, index to head towards 22000 mark in run up to budget. Thus, any dip from hereon should be capitalized to accumulate quality stocks as strong support is placed at 21000.

• On intermarket front, extended period of stable crude prices and firm global cues would act as a tailwind

• Sectorally, we expect PSU, Infra, companies with rural exposure, HFC’s, Corporate lenders, Oil & Gas to relatively outperform in runup to Union Budget

• The formation of outside bar signifies elongation of declines amid elevated volatility that makes us revise support base at 21000 as its is confluence of: A) 50 days EMA placed at 21038 B) 38.2% retracement of past twelve week’s up move 18838-22124

Nifty Bank: 45701

Technical Outlook

Day that was : The Nifty Bank index closed marginally lower on Friday after a volatile trading session . Nifty Bank index closed at 45701 , down 12 points

Technical Outlook :

• The index started the session on a positive note amid firm global cues however failed to sustain at higher levels amid continued selling pressure in HDFC bank . As a result index formed a bear candle although maintained higher low indicating recovery attempt from daily oversold stochastic reading of 7

• Going forward, short term bias remains negative with strong resistance placed at 46700 mark and first sign of abating down ward momentum will be formation of higher high -low on daily charts on sustained basis

• On the down side, next important support for index is placed at 45400 levels which is a confluence of :

• rising 20 -week ema (45800 ) which is being held on many occasions during bull market corrections

• 50 % retracement of entire rally (42105 -48636 ) at 45370

• Low of strongest weekly bull candle of 8 th December 2023 (45484 )

• Structurally, index is undergoing a healthy retracement of November – December rally wherein it gained around 15 % over 9 week period . Index has so far retraced 38 % of the rally over past three weeks and further corrective towards 45700 would only help prices to come out of overbought trajectory . Meanwhile, PSU banks are exhibiting strength and likely to outperform

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