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Nifty :23750

Technical Outlook

Day that was…

Equity benchmark indices settled Monthly expiry session on a marginally positive note, with the Nifty rising by 23 points or 0.10% to close at 23750. However, market breadth remained slightly negative, as advances stood at 1221 against declines of 1594. Sectorally, Auto was the top gainer, up 0.84%, followed by Pharma, which rose 0.68%. On the downside, FMCG slipped by 0.32%.

Technical Outlook:

* The index witnessed a gap up opening. However, failed to capitalize initial up move and drifted towards Tuesday’s low. Subsequently, Nifty traded in merely 80 points for rest of the day that resulted into Doji like candlestick pattern, indicating rangebound activity over third session in a row. We believe, the ongoing consolidation appears to be taking the shape of a higher base formation that shows index’s ability to sustain above key support threshold.

* Key point to highlight is that, the Nifty has been trading above its 200-Day Exponential Moving Average (DEMA) of 23692 for the third consecutive session, reinforcing its significance as a key support zone. However, for a meaningful recovery to unfold, the Nifty must decisively close above 23900, which would pave the way for a further pullback towards 24300–24400, aligning with the 61.8% retracement level of the recent decline (24857–23537) and 50 Days EMA levels. Failure to surpass 23900 zone would keep the index rangebound, with immediate support placed at 23200. Hence, accumulating quality stocks would be the prudent strategy to adopt.

* Mirroring the benchmark move, the broader market has been consolidating over past three sessions while sustaining above 100 days EMA. Further, the formation of higher peak and trough would be necessary to resume uptrend. In the process, stock specific activity would prevail while witnessing sector rotation.

* Only on the breach of critical support of 23200 would lead to extended correction towards 22900, marking the 123.6% external retracement of the previous up-move (23263–24857) and aligning with the lower band of a multi-year rising channel

Nifty Bank : 51170

Technical Outlook

Day that was:

Bank Nifty witnessed rangebound activity and settled the volatile session marginally on a flat to negative note at 51170 , down 0 .12 % . Meanwhile, Nifty PSU Bank index relatively outperformed the benchmark by closing positive by 0 .31 %

Technical Outlook:

* The Bank Nifty opened the session on a positive note and rallied north breaching the high of Friday’s trading session around 51600 in the initial hour of the day . However, the index failed to sustain at higher levels and witnessed a gradual profit booking throughout the day to close the session on a flat note . As a result, daily price action resulted into the formation of high wave candle that confined within Friday’s trading range (51629 -50609 ) .

* Key point to highlight is that, the index need to decisively close above Friday’s swing high which is around 51600 for a meaningful pullback to materialize. Failure to do so, will result in continuation of corrective bias wherein next key support is placed at 49700 mark, which is placed near 52 - week EMA, coinciding with 61 . 8 % retracement of previous up -move (46077 -54467 ) . Meanwhile, on the upside the 50 % retracement mark of the current fall at 52200 (53888 - 50609 ) would act as immediate resistance .

* In tandem with the benchmark move, Nifty PSU Bank index opened gap -up and observed a positive bias in the opening hour . The index has been experiencing significant volatility in that confined range, where it consolidated for the third straight session near 61 . 8 % retracement mark of the previous up -move(6163 -7248), coinciding with 52 -week EMA . Moving ahead, the previous sessions high of 7097 will be key level to watch -out for, sustenance above which would trigger a meaningful pullback .

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