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Nifty :23951

Technical Outlook

Day that was…

Nifty gap downed today due to US Fed meet outcome. After the gap down Nifty settled weekly expiry session at 23951, down 247 points. The market breadth remained in favor of declines with A/D ratio of 1:1.5. Sectorally, barring Pharma all major indices ended in red weighed down by IT ,financials

Technical Outlook:

* The index witnessed a gap down opening (24150-24005). However, supportive efforts from 61.8% retracement of recent up move (23263-24858) helped index to recover some of its early losses as it recovered 135 points from day’s low. As a result, daily price action formed a small bull candle carrying bearish gap above it, indicating extended correction on the breach of key support of 24200 mark. In the process, daily stochastic entered oversold territory after ~1000 points decline.

* Going ahead, follow through strength above previous sessions high on a closing basis would be required to pause the ongoing downward momentum. Else continuation of corrective bias wherein immediate support is placed at 23600. Meanwhile, on the upside, 24800 would continue to act as immediate resistance

* Structurally, the index is undergoing slower pace of retracement as over past ten sessions it has retraced 61.80% of preceding ten sessions rally, highlighting robust price structure. Hence, we expect index to consolidate in the broader range of 23600-24800 zone wherein stock specific action would prevail. Our view is based on following observations:

* a) Despite gap down opening Nifty IT index managed to hold on to the initial lows and recovered some of intraday losses while sustaining in the vicinity of All Time High while Bank Nifty has been witnessing slower pace of retracement, highlighting robust price structure. Cumulatively both sector carries 50% weightage in Nifty

* b) Ratio chart of Nifty 500 / Nifty 100 has been inching upward after recording breakout from 6 months consolidation, suggesting broader market to relatively outperform going ahead.

* The formation of higher peak and trough signifies uptrend is intact that makes us retain support base at 23600 levels as it is confluence of: 

•a) 80% retracement of current rally (23263-24857) at 23580 

•b) 200 days EMA placed at 23690

Nifty Bank : 51576

Technical Outlook

Day that was :

Bank Nifty extended losses tracking weak global cues post US Fed meeting outcome . The index lost 1 . 1 % to settle the session at 51575 . Meanwhile, Nifty PSU Banking index relatively outperformed the benchmark by closing negative by 0 . 6 %

Technical Outlook :

* The Bank Nifty witnessed a gap down opening (52010 - 51428), but the fall was soon arrested as the index observed supportive efforts from 61 . 8 % retracement of recent up move (49787 -53888 ) where it witnessed some part of recovery . Bank Nifty made a high wave candle carrying lower high - low, indicating high volatility amid corrective bias . The index also filled the break away gap that was observed between 51271 -51774 mark on 25th November 2024 .

* Key point to highlight is that, past ten sessions 2600 points correction hauled daily stochastic oscillator in oversold territory, indicating impending pullback . However, to pause the ongoing corrective phase index need to decisively close above previous sessions high . Failure to do so would lead to extended correction wherein next key support is placed at 50500 mark . Meanwhile, on the upside the previous swing high of 53888 would continue to act as immediate resistance .

* Structurally, the index is witnessing slower pace of retracement as over past 10 sessions index has retraced 61 . 8 % of preceding 10 sessions up move (49787 -53888 ) . We believe that the ongoing retracement will make market healthy and form a higher base, paving the way for a fresh up -move once it concludes .

* Mirroring the benchmark index, the PSU Bank index opened gap down extending the retracement from the previous session . However, It encountered support near the previous 200 -day EMA coinciding with 50 % retracement and witnessed recovery from the lower level, thus outperforming the benchmark index .

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