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Nifty : 25151

Technical Outlook

Day that was…

Nifty recorded yet another all time highs to close a volatile expiry session on positive note. Nifty Mid and small cap indices declined ~0.5% despite some recovery in the end. Oil&Gas, FMCG, IT and auto sectors gained ~0.4% each

Technical Outlook:

* The index began session on a muted note led by global cues, however gained ground to hit new highs of 25195, thereby almost achieving our projected milestone of 25200. However, past couple of sessions we have witnessed some profit taking near life highs after 5% rally over ten sessions led prices to overbought readings

* Going forward, bias remains positive as long as index continues to maintain higher low. Only a decisive close below previous session lows, would signal pause in upward momentum and retracement of recent rally can not be ruled out. Similar retracement in Midcap and Small cap segment is already visible

* Meanwhile, the formation of higher high-low on the weekly chart makes us revise support base at 24800 as it is confluence of 20 days EMA coincided with 50% retracement of ongoing up move (24100- 25195) and last weeks low is placed at 24875

* Structurally, retracement of the rally is a normal phenomenon amid bull market and offers an incremental opportunity to buy. We believe over next few weeks, such retracement would offer buying opportunity from long term trend perspective. Our overall bullish stance is backed by:

* A) The current up move is backed by improvement in multi sector participation. We expect short term sectoral rotation to provide cushion

* B) Global headline indices, led by US are in steady uptrend. From directional perspective, continuation of global risk-on environment would lead to bullish spill over barring transitional volatility episodes

* C) Continued strong domestic fund flows provide depth for markets while prospects of lower interest rates in US raise prospects of incremental FII flow going ahead

* The broader market has regained upward momentum after undergoing healthy retracement above 50 days EMA that has set the stage to challenge All Time High. Thus, focus should be on quality stocks with strong earnings

Nifty Bank : 51152

Technical Outlook

Day that was :

Nifty Bank spent another lackluster session on a flattish note and closed at 51152 , up 8 points . NBFCs relatively outperformed benchmark

Technical Outlook :

* The session began on a quiet note ant then prices action remained contained within 51000 -51300 range amid lack of directional bias and formed yet another high wave candle indicating lack of momentum and extended breather

* Short term trend for the index remains positive with higher high -low sequence on weekly time frame . We maintain positive stance and expect index to gradually head towards 51800 levels . Hence, buying dips will be a prudent strategy . Meanwhile, short term support is placed at 50300 which is confluence of a) 61 . 8 % retracement of past three week gains, b) past two week low

* Price structure : A) We observe that index is undergoing healthy base formation after 7 % correction from life highs . Currently, index has retraced, post election, 21 session rally by 50 % and undergoing bottom formation near 100 - day ema

* B) Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 8 - 9 % from highs and in current context 7 % decline is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a strong bottom formation around 200 -day ema around 48500 levels

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