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Nifty : 19890

Technical Outlook

• The index started the session on a muted note. Subsequently, fag end buying demand helped index to resolve above six sessions consolidation. As a result, daily price action formed a bull candle, indicating acceleration of upward momentum

• The breakout from recent consolidation backed by improving market breadth signifies continuation of upward momentum that makes us confident to believe that index would surpass psychological mark of 20000 and gradually challenge All Time High of 20222in coming weeks. In the process, volatility to remain high tracking monthly expiry session coupled with state elections verdict which will weigh on market sentiments. Hence, any cool off should be utilized as incremental buying opportunity wherein strong support is placed at 19600 which we expect to hold. Following are the key monitorable for the upcoming week:

• A) Constant improvement in the market breadth signifies strength in the broader market

• B) Declining brent prices, yields along with positive global setup and strong breadth internals support the bullish chart setup

• C) Post recent decline in bond yields and inflation, US equity majors have formed bullish reversal patterns on medium term charts. Positive global setup would also help domestic indices

• The sequence of higher lows signifies buying demand at elevated support base that makes us confident to revise support base upward at 19600 as it is 61.8% retracement of past two weeks rally (19414-19916) coincided with 50 days EMA placed at 19624 and past two week’s low of 19670

Nifty Bank: 43880

Technical Outlook

• The price action formed high wave candle with higher high -low indicating continuation of positive momentum for third session after bouncing off key support of 43200 which is coincidence of mid -November lows and 200 day ema . Index has been broadly consolidating in 43200 -44500 over past 12 sessions undergoing higher base formation

• Going forward, we expect index to hold 43200 levels and head higher towards 44500 levels in current week . Ongoing consolidation in 43200 -44500 zone would set the stage for next leg of upmove , hence use dips as buying opportunity

• Key short term support is placed at 43200 which we expect to hold, as it is a confluence of :

• 50 % retracement of past two weeks up move (42105 -44056 ) placed at 43080

• value of rising 200 days ema is placed at 43272

• Structurally, key observation has been that, since covid lows, index held 52 -week ema (42700 ) on three occasions, followed by new high in each case in subsequent quarters . We expect same rhythm to be maintained . Meanwhile, Index is in the process of undergoing a retracement of March to July rally while pricing in various negatives in the process . So far index retraced 18 week rally by 50 % over 17 week correction indicating shallow nature of retracement .

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