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Nifty : 19811

Technical Outlook

• The index started the session with a positive gap (19718- 19757) and subsequently consolidated with a positive bias amid stock specific action. The daily price formed a bull candle carrying higher high low, indicating positive bias

• Going ahead, sustainability above 19800 level for next couple of sessions would gradually lead to extension of ongoing pullback. In the process, stock specific action likely to continue as we enter the Q2 earning season. Thus, focus should be on accumulating quality stocks amid ongoing global volatility as strong support is placed at 19300. Our positive bias is based on following observations:

• a) Historically, during secular up move 100 days EMA acts as a strong support. In current scenario as well, buying demand emerged in the vicinity of 100 days EMA

• b) Crude oil will be the key monitorable as pullback in crude is approaching the breakdown area of 3 months rising channel. Thus, decline in crude from higher level would provide impetus for equities

• c) The US Dollar index has been sustaining below last week’s low after 12 weeks up move, indicating dwindling upward momentum amid overbought condition

• The formation of higher peak and trough signifies inherent strength that makes us confident to revise support base upward at 19300 as it is confluence of 100 days EMA is placed at 19257 coincided with last week’s panic low of 19333

• Broader markets indices have been undergoing healthy consolidation wherein over past four weeks it retraced less than 50% of preceding 4 weeks’ rally. The slower pace of retracement signifies robust price structure. Thus, dips should be capitalized to accumulate quality stock

Nifty Bank: 44516

Technical Outlook

• The price action for the day formed a small bull candle that carried higher high -low as beaten down heavyweight stocks bounced back from the oversold zone . Index managed to surpass prior week’s high for fist time in four weeks indicating abating downward pressure and potential signs of reversal

• Going forward, index holding 43300 -43500 despite geopolitical concerns would keep pull back options open towards 45000 levels . Only a decisive close above 45000 would indicate more meaningful reversal from 16 sessions of decline

• Structurally, Index has undergone a healthy retracement of entire April -July rally (19 % over 18weeks) in a shallow manner indicating inherent strength and continuation of medium term uptrend • Our view is backed by following key observations

• Index has retraced 18week rally (38613 -46369 ) by just 38 . 2 % over 11 weeks indicating inherent strength

• PSU banks continue to relatively outperform and could lend some support at lower levels

• Heavy weight private banks including HDFC bank are now oversold and back to their key supports thereby projecting limited downsides

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