By Dharmesh Shah

Equity benchmarks endured their record-setting spree over eight consecutive weeks as Nifty hit all-time high of 17948 despite global volatility. The Nifty settled the week at 17853, up 1.5%. The broader markets relatively underperformed the benchmark as Nifty midcap and small-cap gained ~0.5, each. Sectorally, IT, Realty, FMCG outshone while metal continued to underperform over the week

Bank Nifty Outlook

– The Nifty Bank traded in a range with high volatility and closed the week on a flat note at 37830 levels. The weekly price action formed a small bull candle with a long lower shadow signaling strong support at lower levels. In line with our view, buy on dips strategy has once again worked well as elevated buying demand emerged from crucial support area of 36500

– Going ahead, we expect the index to maintain positive bias and gradually head towards our target of 38600 in the coming weeks as it is the price parity with the previous two major up move of July (34115-36317) and August (34817-37140) each measuring roughly 2250 points added to the recent low of 36327 signals upside towards 38600 levels– Volatility is likely to remain high in the coming week on account of the monthly expiry of the September series and the volatile Asian cues. Buying on decline strategy has worked well in the last 15 months, thereby the current volatility would present incremental buying opportunity in quality banking stocks– The index is seen forming higher high-low in the larger degree chart, which gives up confident to revise the support base higher towards | 36500-36300 levels as it is the confluence of the following technical observations:50% retracement of the current up move (34817-38112) placed around 36500 levelsa) The rising 10 weeks EMA is placed at 36430 levelb) The upper band of the last three months range breakout area is also placed around 36300 levelsc) The last week low is also placed at 36525 levels– The weekly stochastic remain in a strong uptrend thus supports the positive bias in the index

(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