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Nifty : 19646

Technical Outlook

• The index witnessed a choppy week wherein Nifty oscillated in 300 points range amid overbought conditions. As a result, weekly price action formed an inside bar, indicating breather after recent sharp up move.

• Going ahead, we expect Nifty to consolidate in the broader range of 19900-19200 with continuance of stock specific action as the earning season progresses. 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 which makes market healthy. Thereby, dips should be utilized as an incremental buying opportunity to ride next leg of up move.

• Sectorally, BFSI, PSU, Pharma, realty are expected to do well. The pharma index has clocked a fresh All time high after witnessing faster pace of retracement as it retraced 19 months corrective phase in just five months, indicating structural turnaround. We expect, the sector to relatively outperform in the coming weeks.

• On stock front, in large cap we prefer SBI, TCS, Adani Ports, Ambuja Cements, BEL, DLF, Hero Motocorp, Tata Steel, Sun Pharma while in midcap Union Bank, Tata Power, Balkrishna Industries, Intellect Design, Escorts, Granules, Hindustan Copper, GIPCL will remain in focus

• The broader market endured its record setting spree over tenth consecutive week and relative outperformed the benchmark. However, key point to highlight is that, past 4 months 28% rally in Nifty midcap index hauled weekly Stochastic oscillators in overbought condition (placed at 97), indicating possibility of minor profit booking at higher levels. 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 19516

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

Nifty Bank: 45468

Technical Outlook

• The Weekly price action formed a bear candle that is enclosed within last week’s strong bull candle as prices failed to generate following through action amid profit booking at higher levels .

• 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

• 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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