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Technical Outlook

Week that was..

Equity benchmark concluded monthly expiry week on a subdued note. Nifty lost 0.6% to settle the week at 23548. Midcap index endured its northbound journey by clocking fresh All Time high. Midcap and small cap indices outshone by gaining 0.7% and 1%, respectively. Sectorally, PSU Bank, Auto, Metal outshone while defensive sectors like FMCG, pharma remained laggard.

Technical Outlook

* The index witnessed a gap up opening. However, lack of follow through strength above psychological mark of 24000 resulted into profit booking that dragged index downward and filled the gap. Consequently, weekly price action formed a bear candle carrying higher high-low, indicating profit booking at higher levels. This price action successfully established a higher base above the rising trend line drawn adjoining April-May lows.

• The index is undergoing a healthy consolidation in 23800-23200 zone that has set the stage to gradually head toward the 24,500 level in the coming weeks. In the process, strong support is placed at 23400. Our constrictive bias is based on following observations:

* a) Key index heavy weight sectors like Banking, Auto, Capital goods have formed a higher base while, beaten down IT index found supportive efforts from decade long rising trend line, highlighting revival in key index heavy weights

• b) Going ahead, any positive trigger on domestic or global front would reignite catch up activity in the domestic markets as global peers like the S&P 500, Nikkei, and Kospi are already trading at record highs

• c) Brent crude oil has broken down below its one-month rising trendline support. This accelerating decline in global crude prices is highly beneficial for a major importing nation like India

• d) Better-than-expected corporate earnings season has provided a cushion for the broader market, driving improvements in market breadth over the last six weeks as % of stocks sustaining above 50- & 200-days SMA has improved from 63% and 35% to 68% and 45%, respectively
• e) Broad-market indices continue to validate the bullish sector rotation. Following a three-week consolidation phase, the Nifty Midcap index has successfully resumed its upward trajectory to register new historic highs. Meanwhile, the Smallcap index

has revived its upward trend after forming a higher base near its 52-week EMA, yet 8% way from All-time High. The improvement in market breadth validates catch up activity of the small cap space.

Key Monitorable:

* a) Auto Sales Numbers

* b) RBI Policy

* c) IIP Data

* d) Falling crude oil & US 10-year treasury yield would fuel momentum in the Indian market

Intraday Rational

* Trend – Prolongation of consolidation in 23800-23200 range over third consecutive week

* Levels - Buy around 80% retracement of current u pmove 23386-24120

Technical Outlook

Week that was:

Bank Nifty Index ended the week 0.5% positive at 54239 on back of mixed global cues. Nifty PSU Bank relatively outperformed gaining 2.3%.

Technical Outlook:

* After witnessing a gap-up opening index has taken a breather for next three days and filled the Mondays gap area (54213-54590). The weekly price action resulted into small bear candle with upper shadow, indicating profit booking at higher levels.

* Key point to highlight is that, despite minor profit booking from 61.8% retracement of current decline (57456-52780), index maintained higher high higher low formation on weekly chart. Going ahead, we expect index to form a higher base and gradually head towards 56500 being 80% retracement of recent decline

* Amidst ongoing consolidation, we retain support base placed at 53800 being 61.8% retracement of current rally (52780-55405)

* Nifty PSU Bank relatively outperformed the banking space and closed above its 52-week EMA. We expect Index to hold immediate support of 7800 levels and gradually head towards 8600 levels being 61.8% retracement of current decline(9095-7800)

Intraday Rational:

* Trend- Index has been consolidating in 55000-52800 over past three weeks

* Levels- Buy around 80% retracement of current upmove

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