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Nifty : 21255

Technical Outlook

• Index started the session on a subdued note. However, supportive efforts from psychological mark of 21000 helped index to recover some of lost ground and settle the session on a positive note. Consequently, index formed a bull candle carrying lower high-low, indicating pause in downward momentum.

• Going ahead, we expect index to consolidate in the broader range of 21600-20800 which would make market healthy by cooling off the overbought conditions and set the stage for next leg of up move towards 22000 in the coming weeks. In the process, bouts of volatility owing to global development can not be ruled out which can result into extended breather. However, such a breather should not be construed as negative instead dips should be used as incremental buying opportunity as we expect index to hold the strong support of 20800. Our positive bias is further validated by following observations:

A) Breather after faster pace of retracement in Bank Nifty while revived buying demand in Nifty IT index signifies inherent strength. Cumulatively both indices carries ~50% weightage in Nifty which would provide impetus for next leg of up move

B) Strong domestic macros, expectations of rate cuts globally would continue to act as tailwinds

• The formation of higher peak and trough along with shallow retracement signifies elevated buying demand that makes us confident to retain support base at 20800 as its is confluence of 38.2% retracement of past three weeks rally (19768-21593) coincided with last week’s low of 20770 and 20 days EMA placed at 20813

Nifty Bank: 47840

Technical Outlook :

• The price action for the day formed sizeable bull candle that resulted into piercing line bullish pattern indicating emergence of buying demand near last week’s low (46900) on expected lines. Index recovered from early lows as session progressed and accelerated gains in second half to close at days high . On immediate basis current week’s high of 48200 would act as a hurdle for next few sessions . We would expect index to consolidate in 46800 -48200 over next few sessions and form a higher base . A decisive move above 48200 would indicate resumption of up move towards 49000

• Meanwhile, we maintian short term support at 46800 being identical lows of two weeks which we expect to hold ahead of next weeks monthly expiry • Structurally, index posted faster retracement of entire July -October decline in just four weeks highlighting robust price structure . Further participation of both private/public sector banks make the rally more dependable in terms of having further legs . We expect PSU banks to relatively outperform over medium term as the PSU bank index has given a multi year breakout

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