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Nifty : 19611

Technical Outlook

• The index started the session on a subdued note and however, fag end buying demand helped index to recover intraday losses and settled the session on a positive note. Consequently, daily price action formed a bull candle with lower shadow, highlighting elevated buying demand.

• Going ahead, we expect index to resolve above upper band of consolidation placed at 19600 and open the door for next leg of up move towards psychological mark of 20000. Key point to highlight is that, past fifteen days decline retraced back in just four sessions. The faster pace of retracement signifies robust price structure. Past six week’s healthy retracement helped index to cool off the overbought conditions in large caps while broader market relatively outperformed. Therefore, we expect large caps to regain upward momentum in coming sessions. Thus, buying on dips would continue to act as prudent strategy.

• The Nifty midcap and small cap indices have been showing immense strength by enduring sequence of Highs. We expect broader market to continue with its relative outperformance amid overbought conditions owing to past five months spectacular rally of >38%

• The index showed relative strength by displaying decent bounce from intermediate support of 19200 on multiple occasions. Thereby, we revise support base upward at 19200 being confluence of:

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

• b) Past two weeks identical low is placed at 19224

• c) 50 days EMA is placed at 19314

Nifty Bank: 44409

Technical Outlook

• The price action for the day resulted in a high wave candle as index traded choppy and remained enclosed within last week’s price range indicating extended consolidation as Index remains in a broad range of 45000 -43800 for past three weeks while holding key support of 43500 despite global volatility

• Going forward, we expect index to hold key support of 43500 and challenge upper band of consolidation at 45000 mark . Sustained close above 45000 would indicate end of corrective phase and extended gains in coming weeks . Our view is backed by following key observations

• Index is holding key support around 43500 over past three weeks as it is 38 . 2 % retracement of entire rally since March 2023 lows (38613 -46369 ) coinciding with June swing low at 43345 and 100 -day ema

• Past six weeks corrective phase has been shallow and led prices to oversold conditions . Shallow retracement indicate continuation of structural uptrend

• PSU Banking index has spend entire august in a consolidation . While large cap banks may consolidate, smaller PSU banks are seen outperforming going ahead

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