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Nifty :25953

Technical Outlook

Day that was.. The Indian equity benchmark closed the session on a flat note to settle at 25953 tracking muted global cues.

Broader market mirrored the benchmark with Nifty Mid and Smallcap index closed on a flat note.

Sectorally, Barring IT all the other indices closed on a flat to positive note, wherein Auto, Pharma and PSUs banks were the top contributors.

Technical Outlook:

* The Index opened on a flat to positive note and oscillated within a ~130 points narrow band throughout the session. The daily price action resulted in a small bull candle with long lower and upper shadow, indicating a range bound session.

* Key point to note is that, over the last three trading sessions, the index has experienced a shallow pullback, yet the corrective move appears constructive rather than corrective in character, as dipbuying demand has consistently emerged at elevated support levels. This behavior reflects underlying strength and sustained accumulation within the broader trend.

* Going forward, A decisive and sustained follow through strength above the previous session high which coincides with a psychological level of 26000 threshold could act as a catalyst, accelerating the prevailing uptrend and paving the way for a move toward the 26,350 mark in coming weeks.

* In the process, bouts of volatility amidst geopolitical development, inflation print and fag end of earnings season cannot be ruled out. In this backdrop, any decline should be capitalized to accumulate quality stocks with strong earnings as strong support is placed at 25200 being 61.8% retracement of recent up move (24571-26341) coincided with 200 days EMA.

Our positive bias is further validated by following observations:

* The key index heavy weights like financials, oil & gas, Auto (carrying >50% cumulative weightage of Nifty) have regained the momentum which would provide impetus for next leg of up move

* On the broader market front, In line with our view Nifty midcap has rebounded from 52 weeks EMA which has been held firm since past nine months while small cap index witnessed sharp pullback from lower band of six months falling channel. The improving market breadth would result into broadening of the ongoing rally.

* Market breadth has been witnessing improvement, as the percentage of stocks trading above their 50 days SMA has bounced from bearish extremes of 15% to 57% levels, while percentage of stocks above 200-day SMA within the Nifty 500 universe enhanced to 44%. Historically, such contractions in breadth have preceded durable market bottoms, with extreme bearish readings near 15% marking inflection points in the past

Intraday Rational:

* Trend- Higher High-low formation for four consecutive session

* Levels- Buy around 80% retracement of last 3 days upmove(25854-26068)

Nifty Bank :60745

Technical Outlook

Day that was: Bank Nifty ended the day on a marginally positive note at 60745, up 0.2%. The Nifty PSU Bank made new All time High gaining 0.9%

Technical Outlook:

* Index opened on a positive note and traded within 335 points range throughout the session. The daily price action formed is small bull candle with lower shadow indicating supportive efforts above gap-area.

* Index extended the breather for third consecutive session and holding above gap support area (60495-60150), indicating healthy consolidation. The index continues to trade decisively above its key moving averages and has sustained above the physiological level of 60,000 mark. This structural strength reinforces our bullish bias and supports maintaining a positive outlook going forward. We expect Index to gradually resolve higher and challenge its prior swing high of 61700 levels in coming weeks

* On a broader perspective Index has staged a strong rebound from its previous resistance, now acting as support(57628) in line with the change-of-polarity principle, indicating resumption of uptrend. Near term, volatility is likely to stay elevated ahead of the upcoming inflation data. Any corrective declines from current levels should be viewed as buying opportunities as strong demand zone is identified near 59,300, being 50-day EMA and 61.8% retracement of the current up move (57,783-61,674).

* Meanwhile, the Nifty PSU Bank Index made new All time high, a breakout above its prior intermediate highs and closed firmly above that level, reinforcing near-term bullish momentum. Going forward, the index is expected to advance toward the 9,600 zone, corresponding to the measured range breakout of the 8,702– 9,175 band

Intraday Rational:

* Trend- Rebounded from former resistance now turned as support as per change of polarity principle.

* Levels - Buy around 80% retracement of yesterday upmove(60600-60838).

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