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Nifty :24005

Technical Outlook

Week that was…

Equity benchmarks started the CY25 on a buoyant note as monthly auto sales numbers boosted the market sentiment. Nifty gained 0.75% to settle the week at 24005. Broader market outperformed by gaining 1.5%. Sectorally, barring BFSI, Realty all other indices ended in green led by Auto, Energy, FMCG

Technical Outlook:

• The index started the week on a subdued note, however bulls took the charge near 52 Week EMA and staged a smart recovery to reclaimed 24000 mark after nine sessions breather. As a result, weekly price action formed a high wave candlestick pattern, indicating positive bias amid elevated volatility.

• On expected lines, index managed to hold the long-term rising trend line coincided with 200 days EMA, despite depreciating rupee and consistent FII’s sell-off, highlighting robust price structure that has been further validated by a positive divergence on the daily RSI. The overall price structure makes us reiterate our positive stance with a target of 24400 for coming weeks. Further, better-than-expected earnings would fuel the next leg of up move.

• Meanwhile, we expect volatility to remain elevated onset of Q3FY25 earning season, new policy measures from Trump government and Union Budget expectation wherein strong support is placed at 23300 which we expect to hold as it is confluence of 61.80% retracement of Jun-Sept rally (21281- 26277) coincided with 52 weeks EMA placed at 23350. Hence, buying on dips would be the prudent strategy to adopt in quality stocks

• On the broader market front, the ratio chart of Nifty 500 / Nifty 100 has been inching northward after breaking out from 6 months consolidation, suggesting acceleration in broader market outperformance. Further, the significant improvement has been observed in market breadth as currently 49% stock of Nifty 500 universe are trading above 50 days EMA compared to last week reading of 36%, that augurs well for durability of ongoing up move

Nifty Bank : 50988

Technical Outlook

Week that was:

Bank Nifty consolidated in a narrow range over second consecutive week, tracking muted global cues . The index marginally declined by -0.63% to settle the week at 50988. Meanwhile, Nifty PSU Banking index relatively outperformed the benchmark by gaining 0.73% to close the week on a positive note

Technical Outlook:

* The Bank Nifty started the week on a highly volatile note, swinging sharply in both directions. During the week, the index witnessed recovery and gained momentum, breaking its 11-day streak of closing below the previous swing high. The benchmark index formed a high wave candle, indicating that volatility may persist in coming week.

* Going ahead, we expect the bullish momentum to continue while sustaining above key support threshold of 49700 and gradually head towards where the next leg of upmove is placed at 52600 which is 61.8% retracement mark of the recent decline.

* Key point to highlight is that, the index attracted buying demand at the lower end of the long term trendline where it has taken support on multiple occasion, (adjoining the subsequent lows off Mar-23 lows). The weekly momentum indicator RSI reached its support zone of 40. Historically, this zone has triggered bounce on multiple occasions, suggesting impending pullback.

* In tandem to the benchmark index, the PSU Bank is trading within a rising channel, finding support near the lower band. This was followed by sustained buying demand, resulting in formation of high wave bullish candle, indicating further progression. Additionally, the daily RSI witnessed a bullish crossover, indicating accelerated up-move

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