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Nifty : 19680

Technical Outlook

• The Nifty witnessed a volatile session wherein Nifty majorly oscillated within 100 points range. As a result, daily price action resulted into bear candle with small lower shadow, highlighting supportive efforts at lower levels. In the process, Nifty midcap outperformed by gaining 0.4% amid progression of earning season

• We expect Nifty to prolong the ongoing consolidation in the 20000-19500 range ahead of FOMC meet and monthly expiry session that would make market healthy by cooling off the overbought conditions after ~1350 points rally seen over past four weeks. Thus, dips should not be construed as negative instead utilised it as incremental buying opportunity as strong support for the Nifty is placed at 19500.

• The Nifty midcap index is oscillating in a narrow range over past seven sessions amid overbought conditions, indicating possibility of temporary breather after 27% rally off March low can not be ruled out. However, key point to highlight is that, the current up move is backed by sturdy market breadth as currently 75% stocks are trading above 200 DMA, highlighting inherent strength. Thus, any temporary breather should be capitalized to accumulate quality stocks amid ongoing earning season

• Structurally, Nifty has not corrected for more than 400 points while sustaining above 20 days EMA. Thus, we retain our support base upward at 19500, being confluence of:

• A) 38.2% retracement of current up move (18645-19991), at 19478

• B) 20 days EMA is placed at 19468

• C) Since March index has not closed below previous weeks low. Last week’s low is placed at 19562

Nifty Bank: 45845

Technical Outlook

• The Daily price action formed a bear candle with lower high -low indicating breather for second consecutive session led by some large private banks and profit booking in PSU banks after recent run up

• Structurally we maintain positive bias in the index and expect it to gradually head towards 46800 levels Use dips as a buying opportunity

• PSU banks are undergoing a leg of profit taking after last few weeks of rally and expected to undergo higher base formation

• Key short term support is now being revised upwards to 45200 being last Tuesday’s low that coincides with rising 20 -day ema which has been held on multiple occasions since March 2023

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