IGI Logo

Nifty : 19675

Technical Outlook

Equity benchmarks edged higher tracking buoyant global cues fueled by cooling off of US dollar index as well as bond yields. The Nifty settled the Wednesday’s session at 19675 up 232 points or 1.2%. The market breadth remained positive with A/D ratio of 1.8:1 as broader market performed in tandem with the benchmark. Sectorally, all major indices ended in green led by IT, auto, metal, realty

Technical Outlook

• The index staged a gap up opening (19443-19651) tracking firm global cues and approached near our target of 19700. The daily price action formed a bull candle with lower shadow carrying higher high-low, indicating continuation of upward momentum. In the process, Nifty small cap index endured its northbound journey and clocked a fresh All Time High, highlighting relative strength

• The index has logged a resolute breakout from two months falling trend line, indicating acceleration of upward momentum. We expect, index to endure its northbound journey and gradually resolve above immediate hurdle of 19700 that would pave the way towards psychological mark of 20000 in coming weeks as it is 80% retracement of SeptOct decline (20222-18838), placed at 19945. Thus any temporary breather from hereon should not be construed as negative, instead dips should be capitalised to accumulate quality stocks as strong support is placed at 19300. Our positive bias is further validated by following observations:

• A) The improvement of market breadth signifies broader market participation • B) The breach of October low in Brent crude oil would provide impetus to equity market

• C) Further drop in dollar index along with cool off in global yields would provide impetus for acceleration of up move

• The sequence of higher lows signifies buying demand at elevated support base that makes us revise the support base upward at 19300 as it is 50% retracement of past two weeks rally (18838-19691) coincided with 100 days EMA placed at 19314 and past two week’s low of 19310

Nifty Bank: 44201.70

The Nifty Bank gained on Wednesday led by strong global cues and lower inflation print raising odds of interest rate hike cycle peak out . Index closed the session at 44201 .70 , up 310 .45 points or 0 .71 % .

Technical Outlook

• The price action formed red candle as index witnessed mild profit booking after strong gap up action, in the process taking out short term hurdle of 44000 mark, indicating further acceleration in upward momentum . PSU banking space is expected to relatively outperform

• We maintain our short term target of 44700 levels as it is 61 . 8 % retracement of entire down move (46310 -42105 )

• Key short term support is placed at 43200 which we expect to hold in case of volatility, 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, 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

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631