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Nifty : 19365

Technical Outlook

• The index started the session on a subdued note and gradually inched southward as the day progressed. Consequently, daily price action resulted into bear candle confined within Wednesday's trading range, indicating extended breather above 50-days ema placed at 19260.

• The lack of faster retracement on either side signifies prolongation of ongoing consolidation in the broader range of 19650-19200 amid stock specific action.

• Key point to highlight since June 2022 is that, index has not witnessed negative candles for more than 3-4 weeks in a row. In current scenario, we expect index to maintain the same rhythm of time wise correction as Nifty has already corrected over past three weeks where index underwent slower pace of retracement (four weeks rally of 18646-19991retraced by merely 50%) that has made market healthy by cooling off overbought conditions (as weekly stochastic oscillator hauled to 22 levels). Thus, buying on dips would be the prudent strategy as key support is placed at 19200 levels.

• Structurally, secondary correction is the part of the secular bull market. Thus dips should not be construed as negative, instead it should be used as incremental buying opportunity as we believe ongoing healthy retracement would find its feet around key support of 19200 being confluence of:

• a) 61.8% retracement of current up move (18645-19991), at 19160

• b) 50 days EMA is placed at 19258

• c) July month’s low is placed at 19234

• On the broader market front, Nifty midcap, small cap indices have been showing strength by sustaining above its 20 days EMA, highlighting inherent strength. However, past five months remarkable >30% rally hauled weekly stochastic oscillator in overbought territory while breadth indicator (% of stocks above 200 DMA) has approached overbought condition (placed at 90), suggesting impending consolidation amid stock specific action

Nifty Bank: 43891

Technical Outlook

• The price action for the day formed a Doji candle indicating breather after in downward momentum after index declined almost 2700 points from life highs that led prices to oversold readings on daily (23 ) and weekly (13 ) stochastics Past couple of sessions despite weak global cues index managed to recover from lows as supportive efforts emerged around rising 100 -day EMA . However for bias to turn positive index needs to sustain above previous session high on closing basis

• Key point to highlight is after three week decline index has approached key support zone around 43500 and maturity of price/time correction based on following key observations . We recommend buying dips with PSU banking space expected to outperform :

• 38 . 2 % retracement of entire rally since March 2023 lows (38613 -46369 )

• Value of rising 100 -day ema at 43829

• June swing low at 43345

• Time wise, since June 2022 lows index has not formed more than three consecutive bear candles . With three bear candles behind us we expect index to bounce back from key support

• PSU Banking index is at the cusp of multi year breakout and seen relatively outperforming . We expect this relative outperformance to further amplify in coming months

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