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Nifty : 19625

Technical Outlook

* The index staged a decent recovery post gap down opening 19671-19545 and settled slightly on a negative note. As a result, daily price action formed a bull candle carrying lower high-low, indicating extended breather

* Going ahead, we expect prolongation of consolidation in the broader range of 19800-19300 tracking global volatility owing to geopolitical concerns. Thus, stock specific action would prevail amid ongoing Q2 earning season. Key point to highlight is that, on last five out of seven sessions index has reacted from 19800 levels, highlighting stiff resistance at 19800 levels. Hence, only a decisive close above past two week’s identical high would open the door for extended pullback.

* Historically, during secular up move 100 days EMA acts as a strong support. In current scenario we expect 100 days EMA to act as key support

* Broader markets represented by Midcap and Small cap indices undergoing healthy consolidation post >40 % and >50% rally which hauled monthly RSI in overbought territory, indicating possibility of profit booking at higher levels can not be ruled out.

* The formation of higher high and low on the weekly chart signifies conclusion of corrective bias that makes us confident to retain support base upward at 19300 as it is confluence of 100 days EMA is placed at 19320 coincided with current months low of 19333  

Nifty Bank: 43754

Technical Outlook

* The price action formed bear candle with lower high -low indicating continuation of downward bias . However index exhibited some supportive efforts near three months lows of 43500 levels as many index constituents approached oversold trajectory . Index need to sustain above previous session high to indicate pause in downward momentum

* Going forward, 44500 levels remains key hurdle in the short term while immediate key support is placed at three month identical lows around 43500 levels . Only a decisive breach of past three month lows of 43500 would indicate extended decline else consolidation to continue

* Structurally, Index is in the process of undergoing a healthy retracement of April to July rally over past thirteen weeks and also discounting various negatives in the process . In the short term, prices may lead south structurally trend remains firm

* Our structural positive view is based on following key observations

* Index has retraced 18week rally (38613 -46369 ) by just 38 . 2 % over 13 weeks indicating inherent strength

* Large Private banks have undergone decent price/time correction and placed at oversold readings

* PSU bank index has given a breakout from decade long consolidation indicating structural turnaround backed by earnings

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