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Nifty : 22378

Technical Outlook

Day that was…

Equity benchmarks concluded volatile week on a positive note and recorded fresh All Time High of 22339 as strong GDP numbers boosted market sentiment. The Nifty settled the volatile week at 22378, up 0.2%. However, broader market relatively underperformed as nifty midcap and small cap index settled on a negative note. Sectorally, financials, metal, consumption relatively outperformed while IT, healthcare extended breather

Technical Outlook

• In line with our expectation, Nifty managed to hold 21800 mark despite elevated volatility and recovered intra-week losses. As a result, weekly price action formed a bull candle with lower shadow, highlighting buying demand at elevated support base

• The index has retraced past five sessions decline in just a single session, highlighting faster retracement that makes us reiterate our positive stance and expect Nifty to head towards 22700 in coming week’s. In the process, we expect large caps to relatively outperform the broader market as ratio of Nifty vs Nifty 500 has bottomed out around 1 level. Meanwhile, 21800 would act as immediate support in the upcoming truncated week.

• Empirically, in General election year, Nifty has a tendency to bottom out in Feb-March, followed decent rally towards General election outcome in each of seven instances over past three decades. Thereby we expect Nifty to maintain the same rhythm and head towards 23400 by June 2024. Hence, bouts of volatility ahead of general election should be capitalized as buying opportunity from medium term perspective. Our positive bias is further validated by following observations: A) Mirroring the index move Bank Nifty (which carries 33% in Nifty) has witnessed faster pace of retracement as it retraced six sessions decline in just a single session) highlighting robust price structure. B) Buoyancy in US, Europe, Japan equity markets validates strong global trend C) The current up move is backed by strong market breadth as currently 78% stocks of Nifty 500 are trading above 200 days EMA D) The cool off in oil prices and Dollar index are likely to act as tailwind

• On the sectoral front, BFSI expected to lead the rally well supported by IT, metal, auto, capital goods

• On the stock front, in large cap we prefer Reliance Industries, Axis Bank, SBI, Infosys, Hindalco, Gail, Titan, HAL, Ambuja Cement, M&M while in midcaps Jindal Steel and Power, Delhivery, Coforge, BEL, Vguard, Castrol India,GPPL are looking good

• Structurally, formation of higher high-low on the weekly chart signifies elevated buying demand that makes us retain support base at 21800 as it is confluence of: A. 50% retracement of current up move off mid Feb low of 21530 is placed at 21844 B. Past two week’s low is placed at 21860

Nifty Bank: 47297

Technical Outlook

Day that was :

The Nifty Bank staged strong gains on Friday after better than expected Q 3FY24 GDP numbers . Large private and PSU banks led Nifty Bank index to close at 47297 , up 1176 points or 2 .53 %

Technical Outlook :

• The Index started the session on a positive note after Q 3FY24 GDP numbers came better than expected, well supported by firm global cues . Index retraced preceding 7 session decline in single session resulting in strong bull candle as buying demand continued till fag end of the session . Faster retracement of most recent decline indicate inherent strength and strong momentum . In the process index almost approached our target of 47500 faster than expected

• We revise our target for Bank Nifty for March 2024 towards its life high of 48600 supported by continuation of higher high -low formation and strong breadth .

• Meanwhile we also revise short term support to Fridays low at 46200 levels which is expected to hold in case of mild retracement in coming truncated week

• Structurally it is worth noting that each time Index has a tendency to challenge and surpass life highs after a base formation near rising 52 -week EMA . In current context index has already formed a strong base near 44600 levels . We expect index to maintain its rhythm and challenge life highs of 48636 in March 2024

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