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Nifty : 19443

Technical Outlook

• The index witnessed a rangebound activity wherein Nifty traded in merely 60 points range. As a result, daily price action formed a doji like candle, indicating consolidation amid stock specific action. In the process, Nifty small cap index recorded fresh All Time High

• We expect index to trade with a positive bias and gradually head towards 19600 in the coming weeks as it is placement of resistance trend line drawn adjoining Sep-Oct highs. Thus, bouts of volatility should be capitalized as incremental buying opportunity amid progression of earning season. Our positive bias is further validated by following observations:

• A) Bank Nifty (which carries 36% weightage in Nifty) has recorded breakout from 2 months falling trend line after maintaining the rhythm of witnessing buying demand from 52 weeks EMA. In each of past three occasions post COVID lows, Bank Nifty rallied back to highs after testing 52-week EMA. Thus, we expect banking to lead recovery in coming weeks.

• B) The market breadth has seen decent improvement as currently >80% stocks of Nifty 500 are trading above its 200 days SMA compared to Oct reading of 75, indicating inherent strength

• C) The breach of October low in Brent crude oil would provide impetus to equity market

• D) Further cool off in global and domestic yields and reversal in dollar index would be key catalyst for acceleration of up move

• The formation of higher low signifies supportive efforts at elevated support base that makes us revise the support base upward at 19000 as it is confluence of 200 days EMA coincided with last week’s low of 18940

Nifty Bank: 43658

Technical Outlook

• The price action formed inside bar indicating breather after 1700 points rally over past nine sessions while it remains on its course towards short term target of 44000 . Meanwhile temporary dips are expected to attract elevated buying demand

• Index has almost approached short term target of 44000 . We expect index to consolidate near this important milestone for few days and eventually challenge the same . Sustained move above 44000 would lead to further acceleration of upward momentum . Meanwhile we revise short term support to 42800 in case of any volatility . Key support is placed at 42800 levels as it is a confluence of :

• Rising gap of 2 nd November at 42700

• 61 . 8 % retracement of past eight sessions gains (42105 -43800 ) placed at 42750

• value of rising 52 -week ema which has been held on couple of occasions since CY2020 currently at 42800 (transitory breach usually is sign of capitulation)

• Structurally, 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 rall y by 50 % over 15 week correction indicating shallow nature of retracement . Since covid lows index held 52 - week ema on three occasions, followed by new high in each case in subsequent quarters

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