By Dharmesh Shah
Equity benchmarks kick started the CY22 on buoyant note amid firm global cues. The Nifty ended the previous week at 17812, up 2.6%. The Nifty midcap, small cap indices performed in tandem with the benchmark by gaining 2%, each. Sectorally, financials, auto, metal remained at forefront while pharma, IT took breather ahead of result seasons
Bank Nifty Outlook
The Bank Nifty witnessed a strong up move and closed the previous week higher by more than 6%, the highest weekly percentage gains since May 2021. The weekly price action formed a sizable bull candle with a higher high-low and a firm close above the falling channel containing the last two months’ price decline signaling rejuvenation of upward momentum.Going ahead, we expect the index to maintain positive bias and gradually extend the current up move towards 38800 levels in the coming weeks as it is the 61.8% retracement of the entire decline (41829-34018)
In the process, bouts of volatility cannot be ruled out. However, any dip from hereon should not be construed as negative instead capitalise it as incremental buying opportunity as we expect strong buying demand exists around 36500 levelsThe index has support around 36500 levels being the confluence 38.2% retracement of the current up move (34233-38134) and the rising 100 days EMA currently placed at 36700 levelsAmong the oscillators the weekly stochastic is in uptrend and is seen rebounding taking support at its three periods average thus validating positive bias in the index in coming weeks.
(Dharmesh Shah is the Head – Technical at ICICI Direct. Please consult your financial advisor before investing.)
ICICI Securities Limited is a SEBI registered Research Analyst having registration no. INH000000990. It is confirmed that the Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 22/04/2021 or have no other financial interest and do not have any material conflict of interest. I-Sec or its associates might have received any compensation towards merchant banking/ broking services from the subject companies mentioned as clients in preceding 12 months.