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Nifty : 22570

Technical Outlook

Day that was…

Equity benchmark settled the volatile monthly expiry session on a positive note. The Nifty gained 168 points or 0.75% to settle the session at 22570. The market breadth remained firm with A/D ratio of 1.25:1. Sectorally, barring consumer durables, realty all other indices ended in green led by financials, auto, pharma

Technical Outlook

* The Nifty witnessed a gap down opening tracking muted Asian cues. However, supportive efforts from 20 days EMA helped index to recoup initial losses and settled higher. Consequently, daily price action formed a bullish belt hold line candle, indicating robust price structure. Consequently Nifty filled the last week’s bearish gap (22503-22427). Meanwhile, Nifty Small cap index endured its record setting spree over third session in a row. Key point to highlight is that DII’s have shown strength by absorbing the FII’s sell off during the month of April-24 while discounting host of global volatility owing to geo-political concerns

* The buying demand at elevated support base highlight inherent strength that makes us reiterate our positive bias and expect Nifty to challenge the life high of 22775 in coming month. The current rally is backed by improving market breadth as currently ~75% participants are trading above 50 days EMA compared to last week’s reading of 55%, highlighting broader market participation. Thus, buying dips would be the prudent strategy to adopt amid progression of Q4 earnings

* Structually, key observation has been that, Nifty’s two corrections since January 2024 has been 5% each and even last week index maintained this price behaviour, by recovering post 5% correction from life highs and also held lower band of past three-month rising channel, despite geo-political worries

* The broader market has staged a strong rebound in current leg of rally as Nifty small cap index is trading at life highs whereas Nifty Midcap index is just shying <1% away from life highs, that showcase robust structure of broader market which augurs well for durability of ongoing up move

* Formation of higher peak and trough makes us confident to revise support base at 22000 is based on confluence of:

*  a) 50% retracement of recent up move 21778-22625

* b) 20 days EMA is placed at 22342

* C) current week’s low is placed at 22198

Nifty Bank: 48495

Technical Outlook

Day that was…

Day that was : The Nifty Bank index continued its winning streak on Thursday amid stron g rally across PSU banks and positive earnings surprises in Axis . Nifty Bank index closed the session at 48494 , up 0 . 6 % or 306 points

Technical Outlook

* Index commenced the session with a gap down led by weakness in one of the private banks however strong buying emerged across large PSU and private banks which lifted index to new session and weekly high and also closed the bearish gap of 15th April and held rising 20 -day ema indicating elevated buying demand . Price action resulted in strong bull candle which is reflective of dips attracting buying demand near 20 -day ema

* In the coming sessions we maintain buying on dips strategy as we expect index to challenge its life highs of 49000 levels . PSU banks and NBFCs would be in focus amid earnings and expected to outperform

* Key observation has been that index has held 100 -day ema for third time since February 2024 and maintained its rhythm of higher bottom indicating improving price structure

*  Structurally, index is undergoing a retracement of past couple of months rally and would help prices to come out of over bought readings .

* We revise key immediate support for Index at 47500 as it is confluence of :

* Current week’s low is placed at 47628

* 20 days average is paced at 47800

* 50% retracement of recent up move 46579 - 48625 is placed at 47600

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