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Nifty :23344

Technical Outlook

Day that was…

Equity benchmarks began the week on a positive note taking cues from global market. The Nifty gained 141 points to settle at 23,344. The broader market outperformed the benchmark, with an A/D ratio of 1.70:1. Sectorally, Barring Auto and FMCG, all the sectors closed in green. Private Bank, PSU Bank, and Nifty Bank ended the day solidly in the green driven by robust gains

Technical Outlook:

• The Index witnessed a gap-up opening (23,203–23,290) and initially witnessed profit booking after gap filling strength in heavy weight stocks, particularly in the banking sector, propelled the index higher during the first half of the session followed by a range-bound movement for the rest of the session. In the process, it formed a hammer-type candle signaling buying demand at lower levels. Key point to highlight is that after eleven trading sessions, the index managed to close above half a percent, signaling inherent strength.

• Going ahead, we expect index to regain upward momentum and gradually head towards recent swing high of 24,200 in coming months, meanwhile key support remains at 22,500. Thereby, any decline from hereon should be capitalized to accumulate quality stocks in a staggered manner. Going head, we believe anxiety around Trump policies would settle down in next couple of sessions which would fuel momentum in equities. Our constructive bias is based on following observations:

• a) The supportive efforts from lower band of long-term rising channel coincided with 52-week EMA augurs well for next leg of up move

• b) Past four months 12% decline hauled weekly stochastic oscillator in oversold territory (placed at 12), indicating impending pullback

• c) US Dollar index after 6 weeks of positive close cooled off and 10-year yield bear engulfed the previous week’s candle signaling a breather.

• d) On the market breadth front we witnessed a positive divergence where in November we witnessed the reading in percentage of stocks above 50 DMA was 8 compared to 24 in Monday’s session, indicating sentiment improvement going ahead.

• f) Several heavyweight companies are coming out with the Q3FY25 earnings in coming sessions. Better than expected earnings would boost the market sentiment

• On the downside, critical support is placed at 22,500 which aligns with the implied target of the recent consolidation breakdown (24,200–23,300) and coincides with the 50% retracement of the October 2023 to September 2024 rally (18,838–26,277).

• The broader market outperformed the benchmark index, with the Nifty Midcap and Small Cap indices gave a follow-up buying above the high of bullish hammer candlestick pattern and closed above 52-Week EMA, demonstrating inherent strength. We believe the index is undergoing secondary correction in a bull market which we have observed on 3 occasions since Covid lows, where price-wise average correction has been to the tune of 17% while time-wise such correction not lasted for 4-5 months. In current scenario with 15% already in place. Thereby, we expect index to maintain the same rhythm and stage a bounce.

Nifty Bank : 49350

Technical Outlook

Day that was :

The Bank Nifty witnessed follow -through buying from previous week and snapped Friday’s losses to settled the day on a positive note at 49350 , up by 1 .67 % . Meanwhile, Nifty PVT Bank index outperformed the benchmarks, closing on a positive note at 24242 , up by 2 .38 % .

Technical Outlook

• Bank Nifty witnessed a gap -up opening and maintained its upward momentum throughout the session . As a result, the index formed a large bullish candle on the daily charts, establishing a higher high -low pattern, and closed the day with a strong bullish bias .

• Going ahead, we expect the Bank Nifty to sustain its bullish momentum and move towards the mark of 51 ,600 , which is 61 . 8 % retracement of the previous decline (53888 -47898 ) . Meanwhile, any dip from here should be capitalized as a buying opportunity in quality stocks, where the near -term support is placed at 48600 , which is 80 % retracement mark of the recent up -move(48309 -49650 ) .

• Structurally, supportive efforts emerged from the vicinity of the lower band of the rising channel, which coincided with the 80 % retracement of the previous up -move from Jun -24 to Sep -24 (46077 -54467 ) . Additionally, the weekly stochastic indicator has given a bullish crossover amid oversold conditions, indicating impending pullback .

• Mirroring the benchmark index the Nifty PSU Bank index continued the bullish momentum from the previous week and breached Thursday’s swing high of 6374 , indicating continuation to the upward momentum . The weekly stochastic oscillator observed a bullish crossover, indicating acceleration in the ongoing bullish momentum . Going ahead, we expect the index to continue to form a higher base towards 6700 mark which is 61 . 8 % retracement of Dec -24 fall from (7248 -5866 ) .

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