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Nifty : 20133

Technical Outlook

* The index pared initial gains and corrected >100 points from the high. However, buying demand from elevated support base helped index to recover intraday losses and settled the session at higher end. The daily price action resulted into bull candle with lower shadow carrying higher high-low, indicating positive bias. In the process, Nifty midcap and small cap indices endured their record setting spree

* The formation of higher high-low supported by improving market breadth signifies rejuvenation of upward momentum that makes us confident to believe, index would challenge the All Time High of 20222 and gradually head towards 20700 in coming weeks as it is 138.2% external retracement of SeptOct decline 20222-18838. However, the move towards 20700 would be in a non linear manner tracking global volatility coupled with state elections verdict which will weigh on market sentiments. Hence, any temporary breather should be utilized as incremental buying opportunity wherein immediate support is placed at 19800. Following are the key monitorable for the upcoming week:

* A) Constant improvement in the market breadth signifies strength in the broader market

* B) Declining brent prices, yields along with positive global setup and strong breadth internals support the bullish chart setup

* C) Post recent decline in bond yields and inflation, US equity majors have formed bullish reversal patterns on medium term charts. Positive global setup would also help domestic indices

* The sequence of higher lows signifies buying demand at elevated support base that makes us confident to revise support base upward at 19800 as it is 50% retracement of past three weeks rally (19414-20158) coincided with 20 days EMA placed at 19713 and current week’s low of 19800

Nifty Bank: 44481

Technical Outlook

* The price action formed a bear candle with lower shadow indicating supportive action near neckline of head and shoulder indicating continuation of positive momentum 

* Going forward, we expect index to gain further ground and head towards next mile stone of 45500 in December 2023 which is value of 80 % retracement of entire decline (46310 -42105 ) * Key short term support is now being revised upwards towards 43500 which is 80 % retracement of past four session rally that also coincides with last Thursdays bull candle low

* Structurally, key observation has been that, since covid lows, index held 52 -week ema (42700 ) on three occasions, followed by new high in each case in subsequent quarters . We expect same rhythm to be maintained . Meanwhile, Index has undergone healthy retracement of March to July rally while pricing in various negatives in the process . Index retraced 18 week rally by 50 % over 18 weeks indicating shallow nature of retracement that augurs well for structural upmove

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