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Nifty : 22605

Technical Outlook

Day that was…

Equity benchmark clocked a fresh All Time High of 22783 and underwent profit booking. The Nifty settled Tuesday's session at 22605, down 39 points or 0.2%. Broader market relatively outperformed. Sectorally, auto, financials outperformed while IT, metal underwent profit booking

Technical Outlook

* The session started on a positive note and recorded fresh All Time High of 22783. Mirroring the benchmark, Bank Nifty resolved higher and logged a fresh All Time High. However, profit booking from psychological mark of 50000 hauled index lower. Consequently, daily price action formed a small bear candle carrying higher high-low, indicating breather after recent up move. In the process, Nifty approached our immediate milestone of 22800

* Going ahead, we expect index to form a higher base in the vicinity of 22800 and gradually pave the way to head towards our earmarked target of 23400 by General election outcome with immediate support is being placed at 22300. in the progress bouts of volatility ahead of general election phases amidst Q4 earning season can not be ruled out. Thus, utilising dips to accumulate quality stocks would be the prudent strategy to adopt. Our constructive bias is validated by following observations:

* A) BankNifty/Nifty relative performance chart indicates strong outperformance from BankNifty over next 3-4 months. Since 2008, in all six instances where relative ratio line turned up from cycle low, Bank Nifty outperformed by double digit over three-four months period

* B) Breadth continue to improve as percentage of stocks above 50- day ema strengthened from 55% to 75%, highlighting broader market participation

* C) Indian equities have positive correlation with the global peers. The strong setups in key European, US and Japanese market would act as tailwind

* The broader market has staged a strong rebound in current leg of rally as Nifty Midcap and small cap index clocked a new life highs that showcase robust structure of broader market which augurs well for durability of ongoing up move

* Formation of higher peak and trough makes us confident to revise support base at 22300 is based on confluence of:

* a) 50% retracement of recent up move 21778-22783

*  b) 50 days rising EMA is placed at 22202

* c) Last week’s low is placed at 22198

Nifty Bank: 49397

Technical Outlook

Day that was…

The Nifty Bank index settled weekly expiry session on a marginally negative note amid volatility . Nifty Bank index closed at 49397 , down 27 points

Technical Outlook

*  Index started the session on a positive and gained further ground mid way to hit new life highs of 49974 . Profit taking was visible in last hour near higher band of rising channel and psychological mark of 50000 , as 7 . 2 % gains in eight session led prices to overbought trajectory . Day’s price action formed a high wave candle with large higher shadow symptomatic of a breather after rally . IN the process index already achieved immediate target of 50000

* We maintain our positive stance on index with target of 51000 for the month of May 2024 with index to relatively outperform going ahead . However after recent 7 % rally index may undergo healthy retracement wherein we expect 48000 to act as a strong support . Use buy on decline strategy with focus on corporate lenders and NBFC which are expected to do well

* Key observation has been that Bank Nifty/Nifty relative performance ratio chart indicates strong outperformance from Bank Nifty over next 3 - 4 months . Since 2008 , in all six instances, whenever relative ratio line turned up from cycle low, Bank Nifty outperformed by 5 % over three -four months period

* We revise key immediate support for Index at 48000 as it is confluence of :

* Last Fridays low

* Value of rising 20 -day ema at 48001

* 50 % retracement of past six session gains at 48026

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