NIifty Weekly outlook 19-04-2020

Equity benchmarks extended gains for second week in a row amid firm global cues. Nifty ended the truncated week at 9267, up by 1.7%.Broader market outperformed the benchmark indices as Nifty Midcap and small cap gained 4% and 7%, respectively. Sectorally all major indices ended in green led by financials, Metals, Infra, Auto and Pharma.

The Nifty extended gains, on an expected line, as it formed a weekly bull candle with lower shadow indicating elevated buying support at 8800 mark, which is 38.2% retracement of most recent up leg (8055-9261). During the week, Nifty hit intra week high of 9324 thereby approaching in the vicinity of 9500 levels.

It is expect index to resolve higher and challenge 9500 levels, led by strength in global equities while progress on containment of COVID-19 will act as a tailwind. Major US benchmarks have retraced their entire fall already by 50% and showcasing further strength.

Hence if nifty sustained close above 9500 levels would further accelerate the positive momentum thereby leading Nifty towards psychological mark of 10000 levels over coming month.

In the process, we do not expect Nifty to breach a strong support at 8500 levels which is 80%retracement of last two week's up move (8361-9324). Thereby we advise investors to capitalise any dip from here on towards 8800 levels as an incremental buying opportunity, paving the way to challenge the upper band of consolidation of 9500 in coming week.

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