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Nifty : 21454

Technical Outlook

Day that was…

Equity benchmarks snapped two days decline and staged a strong rebound. The Nifty settled Wednesday’s session at 21454, up 215 points or 1%. Market breadth turned positive with A/D ratio of 2.3:1 as broader market relatively outperformed as Nifty Midcap, small cap indices gained 1.8%, each. Sectorally, metal, pharma, auto outshone while private banks relatively underperformed

Technical Outlook

• Index staged a strong recovery post initial decline and recouped some of Tuesday’s decline. As a result, daily price action resembles a piercing line candle, indicating supportive efforts at lower levels

• The formation of lower high-low and sustenance below 20 days EMA signifies corrective bias. Going ahead, to pause the ongoing corrective bias index need to decisively close above previous sessions high 21482. Failure to do so would lead to extended correction towards 20800 in coming sessions. In the process, 21700 would act as immediate hurdle. Hence, stock specific action would prevail ahead of budget session amid progression of Q3 earning season

• On intermarket front, extended period of stable crude prices and firm global cues would act as a tailwind

• The formation of outside bar signifies elongation of declines amid elevated volatility that makes us retain support base at 20800 as its is confluence of: A) Price parity of last leg of decline 22124-21285 projected from Tuesday’s high of 21750 B) 38.2% retracement of past two months up move 18838-22124

Nifty Bank: 45082

Technical Outlook

Day that was :

The Nifty Bank index closed the volatile trading session marginally higher as it recovered from a gap down action ahead of monthly expiry . Nifty Bank index closed at 45082 , up 67 points or 0 .15 %

Technical Outlook :

• The index started the session on a negative note on Wednesday only to stage smart recovery from the lows of 44489 , as buying demand emerged near key support zone of 200 day ema placed around 44500 levels . Price action resulted in a thrusting line pattern indicating pause in downward momentum, For a meaningful recovery, however, index needs to sustain above Wednesdays high of 45485 levels . On the higher side key resistance is placed at 46400 , which is value of 50 - day ema

• Going forward, we expect index to find buying support in the 44500 -44300 zone as it is confluence of : • rising 200 day ema (44550 )

• 61 . 8 % retracement of rally (42105 -48636 ) at 44600

• Equality of current decline with July -Oct 2023 decline ( 9 % ) at 44250

• Structurally, index is undergoing a retracement of November – December rally wherein it gained around 15 % over 9 week period . Index has so far retraced 50 % of the rally over past three weeks and expected to further undergo consolidation while PSU banks are exhibiting strength and likely to outperform

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