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Nifty : 19734

Technical Outlook

• The index witnessed a choppy session as Nifty oscillated in 90 points range. The daily price action formed a small bear candle carrying higher high-low, indicating positive bias amid stock specific action.

• We believe, ongoing consolidation 19900-19200 will make market healthy by cooling off overbought condition wherein stock specific action would prevail amid progression of earning season. Key point to highlight is that, past eighteen week’s spectacular ~19% up move hauled weekly and monthly stochastic oscillator in overbought conditions, indicating possibility of extended consolidation in the coming weeks. Nevertheless, it is important to note that in a structural bull market secondary correction is a common phenomenon. Thereby, dips should be utilized as an incremental buying opportunity to ride next leg of up move.

• The broader market endured its record setting spree over eleventh consecutive week and relatively outperformed the benchmark. However, key point to highlight is that, past 4 months 30% rally in Nifty midcap index hauled weekly Stochastic oscillators in overbought condition (placed at 95), indicating possibility of minor profit booking at higher levels can not be ruled out. Thus, focus should be on accumulating quality stocks on dips in a staggered manner

• We believe, any extended correction from hereon would get anchored around key support of 19200 as it is confluence of:

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

• B) 50 days EMA is placed at 19136

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

Nifty Bank: 45592

Technical Outlook

• The price action for the day formed second inside day candle as prices traded within Friday’s high -low range indicating supportive efforts or breather near 20 -day EMA placed at 45200 levels . Index sustaining above Fridays high of 45727 would lead to further gains towards higher band at 46300 which is last weeks high .

• Going forward we expect index to consolidate its gains, as prices have reached overbought trajectory, with key short term hurdle at 46300 being identical highs of past two weeks

• Key immediate support is placed at 45200 . Only a decisive break below last week lows of 45200 that coincide with 20 -dema, would lead to extended profit taking towards key support of 44500 which is most recent swing low in July 2023

• PSU Banking stocks are undergoing healthy higher base formation and expected to relatively outperform

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