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Nifty : 22515

Technical Outlook

Day that was… Equity benchmarks clocked a fresh All Time High of 22619 and settled the Thursday’s session on a positive note ahead of RBI’s monetary policy. The Nifty gained 80 points to settle the session at 22515. Market breadth remained sturdy with A/D ratio of 1.8:1. Sectorally, IT, financials regained upward momentum while FMCG, Oil & Gas extended breather

Technical Outlook

• The index staged a decent recovery after initial blip and recovered most of the losses. As a result, daily price action formed a bull candle with small bear candle with long lower shadow, highlighting elevated buying demand. In the process, Nifty Midcap recorded fresh All Time High of 50152

• Going ahead, we maintain our positive stance and expect Nifty to gradually head towards 22900 in coming weeks. The shallow retracement above 20 days EMA highlight inherent strength. Thus, accumulating quality stocks on dips ahead of earning season would be the prudent strategy to adopt.

• 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. 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

• 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%

• Key point to highlight is that, the Nifty midcap index has witnessed a faster pace of retracement as it retraced past five week’s decline in less than 3 weeks, highlighting robust price structure. Consequently, Midcap index arrested corrective phase with 9% decline as historically, bull market corrections tend to be average 11% for Midcap index. Post recent correction many quality companies have approached their key support. The formation of higher peak and trough above 50 days EMA highlights inherent strength that makes us confident to revise support base upward at 22100 as it is confluence of:

• A) 20 days EMA placed at 22140

• B) 50% retracement of current up move (21710-22529), at 22120

Nifty Bank: 48060

Technical Outlook

Day that was : The Nifty Bank index got lifted by private banks on Thursday ahead of RBI meet outcome . NiftyBank index closed at 48060 , up 436 points or 1 %

Technical Outlook :

• The Index opened the session with a gap up action led by large private bank after their quarterly business update and then traded in a range of 48200 -47800 to close near days high . Thus price action formed a bull candle with lower shadow as intraday declines attracted elevated buying demand leading index to close above 48000 mark for first time in three months . Higher high -low sequence indicates continuation of positive bias and acceleration of up move on expected lines

• We reiterate our positive stance with a short term target of 48600 in current month . In the process, we expect index to hold the key support of 47200 . 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 47200 as it is confluence of :

• A) 38 . 2 % retracement of recent up move (45828 -48254 )

• B) Weekly low at 47280

• C) value of rising 20-day ema at 47115

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