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Eyes on reciprocal tariffs, in truncated week


Indian equities snapped its five months corrective phase (longest ever losing streak in three decades) and settled the volatile week on a positive note. Sectorally, financials remained at forefront along with Defence, IT and PSU for the week
What to expect: The follow through strength after breaking out of six months falling trend line confirms resumption of uptrend that makes us revise target upward at 24200 for coming weeks. However, one should note that index has rallied >1500 points in past seven sessions which hauled daily stochastic oscillator in overbought territory, indicating possibility of temporary breather cannot be ruled out.
In the upcoming truncated week, volatility would remain elevated on account of reciprocal tariff announcement. Hence, extended breather from here on should not be construed as negative instead utilise it to accumulate quality stocks as strong support is placed at 23000, above which expect index to form a higher base. Our positive bias is further validated by following observations:
Faster retracement: The index has retraced past 19 sessions decline in just 14 sessions, indicating structural turnaround
Bank Nifty : The swift up move in banking space helped Bank Nifty to surpass past two months high, suggesting inherent strength
Structure: Current up move of 9% is strongest since September that confirms conclusion of corrective bias. As a result, previous five-month “sell-on-rally” approach has now shifted to a “buy-on-dips” strategy as sentiment has improved
Breadth: Significant improvement in market breadth augurs well for durability of ongoing up move as currently >50% stocks of Nifty 500 universe are trading above their 50 days SMA compared to early March reading of 7
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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