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Nifty : 22005

Technical Outlook

Day that was… Equity benchmarks started the truncated monthly expiry week on a muted note. The Nifty lost 92 points or 0.4% to settle the session at 22005. The market breadth turned negative with A/D ratio of 1:1.9. Sectorally, Oil & Gas, Consumer Durables, metal, Realty outperformed while financials, IT extended breather.

Technical Outlook

• The index witnessed a range bound activity post initial blip wherein Nifty traded in ~80 points range. As a result, daily price action formed an inside bar, indicating breather after past three sessions up move

• Going ahead, we expect index to trade with a positive bias and gradually resolve higher towards life highs of 22500 in coming months. In the process, bouts of volatility would offer incremental buying opportunity as we approach fag end of the financial year amid monthly expiry week. Thus, buying on dips would be the prudent strategy to adopt as strong support is placed at 21700 which we expect to hold. Our positive bias is further validated by following observations: A) BankNifty has shown resilience in the face of recent volatility as it has undergone healthy retracement wherein it retraced 50% of preceding four week’s up move that makes us believe index would head towards 48000 in coming month wherein strong support is placed at 46000. B) Since CY18, on nine out of eleven occasions mean reversion towards 50 days EMA along with market breadth approaching bearish extremes, offered fresh entry opportunity. Even in current scenario, % of stocks above 50 days SMA of Nifty 500 universe bounced from 20 levels (oversold zone) C) Positive structure in global peers bodes well for positive momentum in the domestic market

• Empirically over two decades, bull market corrections in Nifty Midcap and small cap indices tend to be average 12% -15% respectively. In current context these indices have corrected 9% and 16% already. We believe much of price correction is behind us and expect these indices to undergo a base formation over next few weeks. Post recent correction many quality companies have approached their key support. Investors should focus accumulating quality stocks from long term perspective

• Structurally, since Nov-23 index has been sustaining well above 50 days EMA, highlighting inherent strength that makes us reiterate support base at 21700 as it is confluence of:

• A) 61.8% retracement of Jan-Mar rally (21137-22526), at 21668

• B) Last week’s low is placed at 21710

Nifty Bank: 46600

Technical Outlook

Day that was : The Nifty Bank index snapped two day winning streak amid muted global cues and ahead of monthly expiry . Nifty Bank index closed at 46600 , down 263 points or 0 .54 %

Technical Outlook

• The Index commenced session on a muted note and then traded choppy in just 150 points range (46600 - 46750 ) for entire session as market action was focused on stock specific play and expiry rollover moves

• BankNifty has shown resilience in the face of recent volatility as it has undergone healthy retracement wherein it retraced 50 % of preceding four week’s up move and closed above 20 days EMA, suggesting revival of upward momentum that makes us believe index would head towards 48000 in coming month wherein strong support is placed at 46000 .Volatility is likely to remain due to Monthly expiry

• Key support for Bank Nifty is placed around 46000 mark which we expect to hold as it is confluence of rising 100 - day ema and key trendline connecting January and Feb swing lows

• Structurally, index is undergoing a broader consolidation phase since late December 2023 which we expect to 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 .

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