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Nifty :23813

Technical Outlook

Week that was… Indian equity benchmarks taken a breather after last week’s sharp decline and concluded truncated week at 23815, up 1% despite dollar strengthen and made a high of 85.81 against rupee on intraday basis. Market breadth was nearly balanced, with 1,431 advances against 1,391 declines in Friday’s session. On the sectoral front, the AUTO sector surged by 2.3%, followed by PHARMA, up 2.25%. However, the METAL sector saw a decline of -1.65%.

Technical Outlook:

• The weekly price action resulted into small bull candle confined within last week’s sizable bear candle, indicating breather after >1200 points decline amid oversold conditions. This week’s turnover stood at ?79,000 crore, marking a 20% drop compared to the one month average of ?1 lakh crore turnover, indicating lower participation

• Amidst lackluster week, Nifty traded in 300 points range, highlighting supportive efforts above 200 days EMA after approaching oversold territory. Going ahead, a decisive close above 23900 would fuel the upward momentum towards 24400 in coming weeks as it is 61.8% retracement level of the recent decline (24857– 23537) and 50 Days EMA levels. Failure to close above 23900 would lead to prolongation of consolidation in 23900-23300 range wherein stock specific action would continue. Hence, accumulating quality stocks on dips would be the fruitful strategy to adopt.

• Key point to highlight is that, in the month of January, we expect volatility to remain elevated tracking new policy measures from Trump government, Q3FY25 earning season and Budget expectation which would have bearing on the market sentiment. Despite such an elevated volatility, Nifty holding above 52 weeks EMA placed around 23300 would showcase strength and that would set the stage for extended pullback. The key support threshold of 23300 is based on following observations:

• A) 61.80% retracement of Jun-Sept rally (21281-26277

) • B) 52 weeks EMA placed at 23350 • Mirroring the benchmark move, broader market has been consolidating over past four sessions while sustaining above 100 days EMA. Further, the formation of higher peak and trough would be necessary on the weekly chart to resume uptrend. In the process, stock specific activity would continue while witnessing sector rotation

Nifty Bank : 51311

Technical Outlook

Week that was :

Bank Nifty witnessed range bound action for the week after the sharp decline observed in the previous week . The index gained 1 .09 % to settle the session at 51311 . Meanwhile, Nifty PSU Banking index relatively underperformed the benchmark by ending the week on a flat note, down 0 .07 % .

Technical Outlook :]

• The Bank Nifty started the week on a positive note however, failed to capitalize initial up move, and remained rangebound for the entire week . The index took a breather after witnessing a sizable bearish candle in the previous week . The Bank Nifty witnessed a lackluster week, resulting in an inside bar pattern on the weekly chart, indicating pause after recent decline

• During the week the index saw a brief consolidation within a range of (51600 -50950), where the upper end of the range will act as an immediate hurdle . Moving ahead, the index need to decisively close above the immediate hurdle of 51600 to materialize a meaningful pullback . Failure to do so would lead to extended correction wherein next key support is placed at 50500 mark, which is placed near 200 -day EMA . Meanwhile, on the upside the 50 % retracement mark of the current fall at 52200 (53888 -50609 ) would act as immediate resistance .

• Mirroring the benchmark index, the PSU Bank index witnessed a range bound movement and closed the week on a flat note . The index is witnessing a channelized movement wherein it is approaching the lower band of the channel placed around 6470 -6480 mark . The stochastic oscillator has observed a bullish crossover within oversold territory indicating limited downside . The overall chart structure suggests favorable risk reward setup, thus the focus should be on accumulating quality stocks at current levels .

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