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Nifty : 19674

Technical Outlook

* The index witnessed profit booking post preceding three week’s 1000-point rally that resulted in a sizeable bear candle on weekly time frame

* Going forward we expect Nifty to hold strong support in the 19600-19500 zone and undergo healthy consolidation in the broad range of 19500-20000 in coming expiry week. Use dips as buying opportunity

* Structurally, ongoing decline/volatility is transitory in nature and part of the healthy retracement of three week rally (19223-20222) and should not be construed as negative rather an incremental opportunity to ride the uptrend

* On the broader market front, Midcap index has rallied >40% over past six months and currently undergoing a healthy retracement/consolidation. In a secular bull market secondary correction is a common phenomenon wherein historically 8-10% corrections provided incremental buying opportunity.

* Key support base at 19600-19500 is a confluence of:

* a) 61.8% retracement of current up move (19223- 20222), at 19605

* b) Presence of rising 50-day ema at 19550 and

* C) value of rising trendline connecting key swing lows of June and August 2023

* Breadth: Percentage of stocks above 50-dma sustained above 70% despite consolidation over past two weeks

* Sectors in focus: BFSI, IT, Auto, Power, Consumption

* Preferred Largecaps: Reliance, TCS, Axis Bank, SBI, Maruti Suzuki, Asian Paints, Titan and

* Preferred midcaps: Union Bank, Newgen Software, Granules, JSW Energy, Praj Industries, Arvind Mills, SKF, LIC Housing Finance

Nifty Bank: 44612

Technical Outlook

* The price action for the week formed sizeable bear candle led by profit booking near life highs leading index to close in red for all four trading sessions

* We expect pause in current selling and supportive efforts to emerge in 44000 -44200 zone however index need to form a higher high -low on daily chart to indicate pause in downward pressure and meaningful reversal as Thursdays high at 45200 would act as immediate hurdle

* Structurally, Index has retraced past four week rally by 61 . 8 % this week leading daily stochastic close to oversold readings (reading of 44 )

* Our view is backed by following key observations

* On higher degree, index is consolidating in a broad range of 43600 -46300 since early August as it is digesting strong rally from March lows of 38613

* PSU banks continue to relatively outperform and could lend some support at lower levels

* Heavy weight private banks including HDFC bank are now oversold and back to their key supports thereby projecting limited downside

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