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Nifty : 21742

Technical Outlook

Day that was…

Equity benchmark kick started the CY24 on a positive note amid rise in volatility. Eventually, Nifty gained 10 points to settle the session at 21742. Broader market remained positive with A/D ratio of 2:1 as Nifty midcap and small cap relatively outperformed the benchmark. Sectorally, PSU Bank, FMCG, Oil & Gas and IT outshone while auto, financials took a breather

Technical Outlook

• The index started the first session of CY24 on a positive note and gradually clocked a fresh All Time High. However, fag end profit booking dragged index lower. The daily price action formed a doji like candle, indicating elevated volatility amid positive bias. In the process, Nifty midcap and small cap logged a fresh All Time High

• Going ahead, we expect index to endure it`s northbound journey and gradually head towards psychological mark of 22000 in the coming weeks. Key point to highlight is that, % of stocks above 200 days EMA have surpassed 90% mark indicating overbought conditions. However, we expect positive momentum would continue as long as index maintains higher high-low on weekly chart. Thus, any temporary breather ahead of Q3 earning season should not be construed as negative instead dips should be capitalized as incremental buying opportunity as we believe strong support is placed at 21300. Our positive bias is further validated by following observations:

• A) Revival of upward momentum in the financial and IT sector which carries 50% weightage in Nifty provides impetus for extension of ongoing up move

• B) Global market setups becomes more supportive as US and European indices are coming out of two years of consolidation

• C) Declining yields, and stable currency (INR/USD) along with strong institutional flows would act as tailwinds

• The elongation of rallies followed by shallow retracement exhibits inherent strength that makes us confident to revise support base at 21300 as its is confluence of 61.8% retracement of past six sessions up move (20977-21834) coincided with last week’s low of 21329

Nifty Bank: 48234

Technical Outlook

Day that was :

The Nifty Bank index took a pause for second session amid marginal profit booking in heavyweights . Nifty Bank index closed the session at 48234 , down 58 points on Monday . On a relative basis PSU banks performed well

Technical Outlook :

• The price action for the day small bear candle with lower high -low indicating profit taking near life highs amid overbought conditions on expected lines

• Going ahead, we expect index to gradually head towards 49000 levels in coming weeks . However, taking note of overbought readings (weekly stochastics of 92 ) we do not rule out marginal profit taking, hence recommend to adopt buy on dips strategy

• Meanwhile, we revise short term support to 47000 being last week’s lows that coincide with rising 20 -day ema (46937 )

• Structurally, index formed a higher bottom after strong breakout above 46300 levels in faster time highlighting robust price structure and elevated buying demand . Further, participation of both private/public sector banks make the rally more dependable with large caps being in focus

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