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Nifty : 23264

Technical Outlook

Day that was…

Equity benchmarks extended breather over second consecutive session ahead of US Fed meet outcome. Nifty settled the Tuesday’s session on a flat note at 23265. The market breadth remained in favour of advances with A/D ratio of 1.8:1 as Midcap, Small Cap relatively outperformed. Sectorally, auto, Oil & Gas, realty outperformed while pharma, FMCG took a breather

Technical Outlook

* The index witnessed a range bound activity wherein stock specific action prevailed. As a result, daily price action formed a high wave candle, indicating breather amid positive bias. In the process, Nifty Midcap and small cap indices endured with their record setting spree

* The index is undergoing breather after stagging a strong recovery of 10% from last week’s low. Going ahead, sustainability above 23400 would fuel the upward momentum and drive Nifty towards 23800 in the coming weeks. Failure to do so would lead to higher base formation in the broader range of 23400-22600 with a positive bias amid stock specific action

* We believe, key monitorable like Union Budget, Fed meet outcome would dictate the further course of action. Therefore, any temporary breather from hereon should be capitalized as incremental buying opportunity wherein immediate support is placed at 22600. Our positive bias is based on following observations:

a. BankNifty reversed strongly from 52-week ema, maintaining its two-year rhythm, and expected to head towards 51000

b. Global setup continues to remain strong and acts as a tailwind with prospects of interest rates cut now on horizon

c. Brent prices are making lower high-low and expected to remain in $ 75-85 range for extended period

* Structurally, the formation of higher peak and trough signifies robust price structure that makes us revise support base at 22600 as it is confluence of:

a. A) 20 days EMA is placed at 22760

b. B)38.2% retracement of current up move 21281-23411, placed at 22598

Nifty Bank: 49705

Technical Outlook

Day that was: 

Nifty Bank index took breather for second successive session amid lack luster trading session . Nifty Bank index closed at 49705 , down 75 points

Technical Outlook

* The index opened on a muted note and then consolidated in a 49600 -50000 range for rest of the session . Index took breather near psychological mark of 50000 for second session resulting in a narrow range candle

* Going forward, we expect index to gradually head back to its life highs of 51133 in coming weeks in non -linear fashion . Therefore, intermediate dips or retracement of past four session gain should not be construed as sign of weakness, rather be used as an incremental buying opportunity as we expect index to form higher base above 48500 levels

* In the process, immediate support will be placed at 48500 levels for coming weeks as it is 38 . 2 % retracement of past four session gains

* As index has already undergone 10 % correction, we believe price wise correction is behind us and index to gradually continue its structural uptrend after brief period of consolidation

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