IGI Logo

Nifty : 22327

Technical Outlook

Week that was… Equity benchmarks concluded truncated week on a positive note tracking firm global cues. The Nifty gained 230 points or 1.1% to settle the monthly expiry week at 22327. Midcap and small cap indices performed in tandem with the benchmark by gaining ~1.5%, respectively. Sectorally, barring IT all other indices ended in green led by Auto, oil & gas, PSU outperformed

Technical Outlook

• On expected lines, Nifty managed to hold the key support threshold of 21700 and gradually resolved higher towards our earmarked target of 22400. Consequently, weekly price action formed a bull candle carrying higher high-low, indicating resumption of upward momentum

• Going ahead, we expect index to endure its northbound journey and gradually head towards 22700 in coming weeks. Empirically, in General election year, index has a tendency to bottom out in the first quarter of the calendar year, followed by rally (minimum 14% rally from lows) towards General election outcome in each of seven instances over past three decades. In the current scenario, we expect index to maintain the same rhythm as index has already undergone corrective phase in the first quarter and formed a higher base. Thereby, setting the stage for next leg of bull rally towards 23400 by Election outcome. In the process, 21900 would act as immediate support which we expect to hold. Our positive bias is further validated by following observations:

• A) Bank Nifty: The robust price structure of heavy weight banking constituents signifies inherent strength that bodes well for leadership of BFSI in next leg of up move. We expect, Bank Nifty to retest the life high of 48600 while strong support is placed at 46400

• B) Seasonality: In an election year, April has been positive on 5 out of 7 occasions over past three decades with an average gain of 3.8% • C) Firm Global Cues: Buoyancy in global market confirms strength in equities as US, UK markets are trading at life highs. We expect, Nifty to perform in tandem with the global peers as domestic market have direct correlation with the global peers • Sectorally, we remain constructive on BFSI, Capital goods, Auto, Metal, Pharma • Historically, bull market corrections in Nifty Midcap and small cap indices tend to be average 12% -15% respectively. In current scenarios, with 9% and 16% correction behind us we expect these indices to undergo a base formation over next few weeks. Post recent correction many quality companies have approached their key support ahead of earning season

• The formation of higher peak and trough above 50 days EMA highlights inherent strength that makes us confident to revise support base upward at 21900 as it is confluence of: • A) 50 days EMA placed at 21910 • B) 80% retracement of current up move (21710-22516), at 21870

• C) Last week’s low is placed at 21948

Nifty Bank: 47125

Technical Outlook 

Week that was : The Nifty Bank index concluded last week of the FY24 on a positive note . Bank Nifty gained 261 points to settle the week at 47125 .

Technical Outlook

• The Index commenced the truncated week on a flat note . However, buying demand in the fag end of the week helped index to resolve above 47000 mark and form a higher high on the weekly chart . Consequently, weekly price action resulted into a Bullish Belt Hold line candle, indicating continuation of positive momentum

• The higher base formation above 20 days EMA highlights inherent strength that bodes well for extension of ongoing upward momentum towards life high of 48600 in coming month . In the process, we expect index to hold the key support of 46400 . Thus, buying dips would be the prudent strategy to adopt

• Structurally, index has undergone healthy consolidation phase since late December 2023 which has set stage for next up move . Within this phase index has maintained its rhythm of forming higher lows near 52 -week ema indicating continuation of structural uptrend .

• Formation of higher trough on the weekly chart signifies robust price structure that makes us revise the support base upward at 46400 as it is confluence of :

• A) 61 . 8 % retracement of recent up move (45828 -47440 )

• B) last week’s low is placed around 46530

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631