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Nifty :24768

Technical Outlook

Week that was…

Equity benchmark concluded volatile week on a positive note amid expectation of US Fed rate cut. Nifty settle the week at 24768, up 0.4%. In the process, small cap index recorded fresh All Time High. Sectorally, barring IT, Consumer Durables, Financials outshone while FMCG, Oil & Gas, PSU Banks extended breather

Technical Outlook:

* The fag end buying demand from 61.8% retracement of last up move helped index to recover lost ground as Nifty managed to hold last week's low of 24000 on expected lines and staged a strong rebound, highlighting inherent strength. The weekly price action formed a bull candle with lower shadow, indicating buying demand at elevated support base

* Going ahead, we reiterate our positive stance and expect Nifty to resolve higher towards 25200 while unfolding Santa rally. Hence, focus should be on accumulating quality stock on dips as support base is now revised upward at 24200. Our positive stance is validated by following observations:

* a) Heavy weight sectors to drive next leg of up move: Nifty IT endured its record setting spree over second consecutive week while Bank Nifty bounced after retesting two-month range breakout area (52600). Cumulatively both sector carries 50% weightage in Nifty

* b) Broader market in focus: Ratio chart of Nifty 500 / Nifty 100 recorded breakout from 6 months consolidation, suggesting broader market to outperform going ahead.

* c) Structure: Elongation of rallies followed by slower pace of retracement amid improving market breadth indicates robust price structure. Buying on dips would be the prudent strategy to adopt

* On the sectoral front, we remain positive on BFSI, IT, PSU, Capital Goods & Infra while Defense, Consumer Discretionary offers bargain buy opportunity

* The Nifty midcap index extended gains over fourth consecutive week while Nifty small cap index recorded fresh All Time High. The traction in the broader market is backed by improving market breadth as currently, 57% stocks of Nifty 500 universe are trading above 50 days SMA compared to November reading of 35%

* The formation of higher pean and trough makes us confident to revise support base at 24200 levels as it is confluence of:

* a) 61.80% retracement of current rally (23263-24857) at 24250

* b) Friday’s panic low is placed at 24180

Nifty Bank : 53583

Technical Outlook

Week that was :

Bank Nifty witnessed significant volatility during Friday's session and concluded the last trading session of the week at 53583 , up by 0 .69 % . Meanwhile, Nifty PVT Bank index relatively

Technical Outlook:

*  The Bank Nifty opened on a negative note, extending the selling pressure from the previous session . However, the decline was halted as the index found strong support near the previous breakout level of 52 ,450 . This triggered a sharp recovery, with the bulls stepping in forcefully to close the session on a positive note . Consequently, weekly price action resulted into bull candle over fourth consecutive week with sizable lower shadow, highlighting elevated buying demand

* On expected lines, index managed to hold the key support threshold of 52000 despite elevated volatility and staged a strong recovery that augurs well for resolving above the recent consolidation range (53888 -42264 ) which would set the stage to challenge the lifetime highs of 54400 in coming weeks and further head towards 55000 as it is 123 . 6 % external retracement of 54467 -49787 . In the process, bouts of volatility would prevail ahead of US Fed meet outcome . Therefore, any decline from hereon should be capitalized at incremental buying opportunity as key support is placed at 52000 as it is 80 % retracement of current up move (51693 - 53888 )

* Structurally, elongation of rallies followed by slower pace of retracement, exhibits robust price structure that bodes well for extension of ongoing uptrend

* Mirroring the benchmark index, the PSU Bank index also staged a sharp recovery from lower levels . The bulls absorbed the selling pressure effectively, driving the index to closed near its intraday high . Moving ahead, we expect the PSU Bank index to resumed its outperformance and break higher, surpassing its recent swing high of 7248 , signalling further bullish momentum

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