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Nifty : 24316

Technical Outlook

Day that was

Equity benchmarks extended breather amid stock specific action. Nifty settled the weekly expiry session at 24324, down 8 points. However, market breadth turned positive with A/D ratio of 1.6:1 as Nifty midcap and small cap indices relatively outperformed the benchmark. Sectorally, oil & gas outshone while pharma took a breather

Technical Outlook:

* The index recouped most of its intraday losses and settled the session on a flat note. The daily price action resulted into inside bar, highlighting range bound activity amid stock specific action

* The buying demand from elevated support base of 10 days EMA (which has been held since election result low) highlights inherent strength that bodes well for continuation of upward momentum towards our earmarked target of 24700 by July 2024. However, traders should note that, past five week’s sharp up move of 15% has hauled weekly stochastic oscillator in overbought territory (placed at 95). Thus, possibility of temporary breather at higher levels cannot be ruled out ahead of budget coupled with onset of Q1FY25 earning season

* Further, only a decisive close below 10 days EMA would lead to temporary pause in ongoing upward momentum. However, such breather should not be construed as negative instead capitalized it as buying opportunity as key support is placed at 23700. Our positive bias is further validated by following observations:

* A) The formation of higher peak and trough supported by sturdy market breadth signifies inherent strength (currently 82% of stocks trading above 50 days EMA

* B) Global set up continues to remain strong footing and barring minor retracements does not flag bigger volatility

* Structurally, the elongation of rallies followed by shallow retracement signifies buying at elevated support base that makes us revise support base at 23700 as it is 20 days EMA coincided with 61.8% retracement of past two weeks up move 23350- 24401

Nifty Bank: 52270

Technical Outlook

Day that was :

Nifty Bank index closed in green helped by recovery in private banks in second half . Index gained 81 points or 0 .16 % to close at 52270

Technical Outlook :

* The index remained under pressure during first half after open while second half recovery led index to close in green, resulting in a hammer like candle as buying demand emerged near rising 21 -day ema and daily stochastics approaching oversold readings after six days of correction . Over past five sessions index has failed to sustain above previous session high . Hence sustainability above Thursdays high would indicate pause in downward bias and a bounce back towards upper end of consolidation range at 53500

* Going forward, holding immediate support and last week low of 52000 would extend ongoing consolidation while only a decisive breach of 52000 would be a sign of extended profit taking

* PSU banking stocks have witnessed extended profit taking/consolidation over few weeks and expected to form a higher bottom formation over next few sessions

* Meanwhile, we revise short term support to last week’s low of 52000 which also coincide with rising 21 -day ema

* Price structure : We observe that index is maintaining its higher high -low formation on multiple time frames and remain in steady uptrend and short term declines are attracting buying support . Hence consolidation in the short term will help index to undergo higher base formation and work out of overbought readings

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