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Nifty : 22529

Technical Outlook

Day that was…

Equity benchmarks started the truncated week on a positive note. Nifty settled Tuesday’s session at 22529, up 27 points. However, market breadth turned in favour of decline as small cap index relatively underperformed the benchmark. Sectorally, metal, PSU Banks remained in limelight while FMCG, private banks extended breather

Technical Outlook

* The index pared the initial gains and settled the volatile session on a flat to positive note. Daily price action formed a small bull candle, indicating continuation of positive bias. In the process, Nifty midcap index endured its record setting spree

* Going ahead, we maintain our positive bias and expect Nifty to challenge All Time High of 22800 in coming weeks. In the process, volatility would remain high as expectations related to General election outcome would have bearing on market direction coupled with progression of Q4 earning season. Thus, buy on dips would be the prudent strategy to adopt. Our positive stance is based on following observations:

* A) Nifty has historically corrected 6% during polling phase in past four elections and three times hit new highs around election outcome. In current scenario , index staged a rebound after correcting 4.5% from life highs

* B) Over 70% of Nifty constituents indicate further upsides at current juncture. Banking, capital goods, Oil & Gas, Power, Auto and FMCG heavyweights are indicating bullish undertone

* C) Major global indices are at life highs. Although in the short term our markets are ignoring those cues, once General election related anxiety settles down, strong global setups would act as tailwind for further market direction

* Structurally, formation of higher peak and trough makes us confident to retain support base at 22000 as it is 80% retracement of current up move (21821-22502)

Nifty Bank: 48048

Technical Outlook

Day that was…

The Nifty Bank index snapped three day winning streak weighed down by private banks . PSU banking stocks relatively outperformed . Index concluded session at 48048 , down 151 points or 0 .31 %

Technical Outlook

* The Bank Nifty underwent marginal profit taking after it gained 1200 points over preceding five sessions from key support of 47000 levels and in the process retraced preceding eight session decline by little over 38 . 2 % . Slower pace of retracement of decline, indicate extended consolidation in coming week with positive bias in the broad range of 49000 -47000 levels . Hence buying dips would be prudent approach . PSU banking stocks witnessed buying demand at lower band of consolidation

* Since late Jan’24 low of 44633 , index is following a well channeled up move forming higher bottoms in the vicinity of rising 100 -day ema (47050 ) . Last week index respected this price behaviour and staged recovery from 47000 mark

* Structurally, current decline from life highs is a healthy retracement and therefore does not alter positional bullish stance . We therefore expect that current decline would result into a higher base formation around 47000 followed by resumption of rally

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