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Nifty :24642

Technical Outlook

Equity benchmark continued with its rangebound activity ahead of US inflation data. Nifty settled the lackluster session at 24642, up 32 points. The market breadth remained strong as Nifty midcap, smallcap gained 0.3%, each Sectorally, consumer durables, IT, Auto outperformed while financials took a breather

Technical Outlook:

* The index traded in a narrow range of 100 points throughout the day. As a result, daily price action resulted into small bull candle with shadow on either side, indicating extended breather after recent sharp up move. In the process, Nifty smallcap index continued to recorded fresh All Time High

* Going ahead, prolonged consolidation will make market healthy that would set the stage for next leg of up move towards 25200. Key point to highlight is that, index is witnessing slower pace of retracement as over past 4 sessions stock has merely retraced 38% of preceding five sessions up move and forming a higher base above cluster of short term and medium term moving averages.. Hence, ongoing breather should be utilized to accumulate quality stocks on dips as immediate support is placed at 24300. Our positive stance on index is based on following observations:

* a) The shallow retracement in Bank Nifty post two months consolidation breakout signifies strength that makes us believe, Bank Nifty would eventually challenge lifetime highs of 54400 in coming weeks

* b) The rejuvenated traction in the broader market backed by improving market breadth augurs well for durability of ongoing up move. The faster pace of retracement helped Nifty small cap index to recorded fresh All Time High. Meanwhile, % of stocks above 50 days EMA of Nifty 500 universe has improved to 63% from last week's reading of 35%

* Structurally, Nifty and BankNifty maintained the rhythm of arresting intermediate correction within 12% and 9%, respectively, indicating robust price structure that makes us revise support base at 24300 levels as it is confluence of:

* a) 61.8% retracement of current rally (23873-24857) at 24250

* b) cluster of short and medium term moving average is placed around 24300

Nifty Bank : 53391

Technical Outlook

Day that was :

The rangebound action continued in Bank Nifty where the index concluded Wednesday’s session at 53414 , down by 0 .30 % . Meanwhile, Nifty PSU Bank index relatively underperformed the benchmark by closing negative by 0 .85 %

Technical Outlook :

* Bank Nifty traded within the range of 53888 -52850 for the fifth consecutive trading session . The daily price action once again formed an inside bar that confined within last Thursday’s price action, thus continuing the consolidation after recent sharp up move .

* The index is undergoing slower pace of retracement as over past 4 days it retraced 9 % and subsequently undergone base formation for next 3 - 4 weeks before unfolding next leg of up move . In current scenario, index appears to be maintaining the same rhythm as it staged a strong rebound post ~ 8 % correction

* Mirroring the benchmark index, the PSU Bank index continued its rangebound action by consolidating within the range of 7056 -7248 for the fifth consecutive session above 2 months range breakout area of 7000 . Following the recent sharp up move, the ongoing consolidation will help the index to form a higher base that would set the stage for surpassing the September 2024 high of 7050

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