By Dharmesh Shah
Equity benchmarks snapped the two weeks losing streak and concluded a truncated week on a positive note as Nifty settled at 17916, up 1.4%. The broader markets relatively outperformed as Nifty midcap and small-cap rose 3.2% and 2.5% respectively. Sectorally, all major indices ended in green led by IT, Metal, PSU Bank, realty.
Bank Nifty Outlook
– The Bank Nifty traded in a range and closed the truncated week on a positive note by gaining 1.2%. The weekly price action formed a Doji candle which remained enclosed inside previous week price range signaling a lack of follow-through to previous week sharp decline signifies supportive effort around the 50 days EMA placed around 38400 levels– Going ahead, we expect the PSU banking stocks to continue with its outperformance while the Bank Nifty to continue with its healthy consolidation in the broad range of 38400-40500.– We believe the current breather should not be seen as negative instead it should be used to accumulate quality banking stocks for the next leg of up move– The weekly stochastic has cooled off from the overbought territory and is approaching its previous major low of August 2021 thus signaling a range bound consolidation in the index in the coming week
– The short term support base for the index is placed at 38400 levels being the confluence of:a) 61.8% retracement of the recent up move (36876-41829)b) the upper band of the recent seven months range breakout areac) the rising 10 weeks EMA is also placed at 38295 levels
(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
