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Nifty : 19694

Technical Outlook

• The index witnessed a lackluster session and formed an inside bar confined within Friday’s trading range 19806- 19667, indicating breather amid stock specific action. In the process, Nifty midcap and small cap indices endured their record setting spree

• We believe, index is undergoing breather after >1000 points rally seen over past three weeks. Thus, couple of days breather can not be ruled out which would pave the way for next leg of up move towards psychological mark of 20000 in coming weeks as it is 80% retracement of SeptOct decline (20222-18838), placed at 19945. Hence, any dips form hereon should note be construed as negative, instead capitalize it as buying opportunity as strong support is placed at 19400 which we expect to hold. Our positive bias is further validated by following observations:

• A) Revived buying demand in the broader market backed by improving market breadth signifies inherent strength

• B) Crude Oil: The acceleration of downward momentum post breach of October low signifies weakness in Crude that would in turn act as tailwind for equity

• 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 19400 as it is 50% retracement of past two weeks rally (18838-19875) coincided with 100 days EMA placed at 19314 and past two week’s low of 19330

Nifty Bank: 43585

Technical Outlook

• The Daily price action formed a Doji after Fridays gapdown and bear candle, indicating lack of follow through selling and supportive efforts in the vicinity of 200 -day ema (43300 )

• Going forward, holding immediate support of 43200 would keep pull back options open towards 44000 mark We expect consolidation in the range of 43200 -44400 in coming few sessions .

• 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, 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 . 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

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