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Nifty : 24413

Technical Outlook

Day that was…

Equity benchmarks extended breather over four consecutive session tracking muted global cues. The Nifty settled the session at 24413, down 65 points or 0.3%. Sectorally, Oil & Gas, Consumer Durables outshone while financials, FMCG took a breather

Technical Outlook:

* The index witnessed a range bound activity and settled the session on a muted note. The daily price action formed an inside bar within last sessions bear candle, indicating breather above 20 days EMA. Meanwhile, India VIX extended breather over second consecutive session as anxiety around Union budget is settling down

* The sequence of lower high above 20 days EMA, signifies breather after past 7 weeks sharp up move. We believe, prolongation of consolidation in the broader range of 24700- 24000 would make market healthy. In the process, focus would shift back to Q1FY25 earrings and global cues as stock specific action amid sector rotation would prevail. Further, only a decisive close above 24700 would open the door for next leg of up move

* On the broader market front, Nifty Midcap and Small cap indices have taken a breather after rallying 23% and 28% respectively off election outcome day low which hauled weekly stochastic oscillator in overbought territory, suggesting extended breather in the broader market which has historically offered incremental buying opportunity in quality stocks

* Structurally, the formation of higher peak and trough signifies supportive efforts at elevated support base. As a result, strong support is placed at 24000 as it is confluence of:

* A) 61.8% retracement of past four weeks up moves 23350- 24854)

* B) July Month’s low is placed at 23993

Nifty Bank : 51317

Technical Outlook

Day that was :

Nifty Bank continued its decline on Wednesday amid profit taking in heavyweights amid earnings progression . Bank Nifty retreated 461 points or 0 . 9 % to settle at 51317

Technical Outlook :

* The Index remained under pressure through out the session while some bounce back occurred in second half 50 -day ema placed at 51800 mark . Sequence of higher high -low and selling pressure around 20 -day ema indicates extended profit taking and continuation of corrective bias . We therefore believe that in short term 52000 which is Wednesday high and 20 day EMA remains an important resistance below which corrective bias to continue

* While BankNifty has held immediate support of 51000 on closing basis, a decisive breach of the same would signal further correction towards next support of 49600 which is confluence of a) 50 % retracement of post election rally and b) value of rising 100 -day ema

* Price structure : We observe that index is undergoing retracement from overbought readings after 15 % rally . Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 9 % from highs and in current context 5 % correction is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a higher bottom formation as against election day low

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