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Nifty : 21239

Technical Outlook

 Day that was…

Equity benchmarks drifted downward as the selling pressure in index heavy weights weighed down the market sentiment. The Nifty plunged 333 points or 1.5% to settle the session at 21239. Market breadth remained in favour of declines with A/D ratio 1:3 as broader market relatively underperformed since Nifty Midcap, small cap indices lost ~3%, each. Sectorally, barring pharma, all other indices ended in red dragged by financials, metal, FMCG, PSU

Technical Outlook

• Index started the truncated week on a positive note. However, lack of follow through strength resulted into decline that gradually accelerated on the breach of last session’s low of 21542. Consequently, daily price action resulted into sizable bear candle, indicating extended correction

• The elongated declines followed by shallow retracement signifies corrective bias. Key point to highlight is that, index has closed below its 20 days EMA for the first time since Nov-23, exhibiting pause in upward momentum. Going ahead, we expect index to extended the corrective bias and gradually head towards key support threshold of 20800. Thus, formation of higher high-low would be required to pause the downward momentum. 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

.0• 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: 45015

Technical Outlook

Day that was :

The Nifty Bank index witnessed sharp decline on Monday after a positive start amid notable profit taking/selling in heavyweight banks amid earnings related concerns . Nifty Bank index closed at 45015 , down 2 .26 % or 1043 points

Technical Outlook :

• The index started the session on a positive note with a gap up action, however failed to sustain above previous session high for fifth session in a row as participants utilized a positive start to take profits in large banks leading index to close below last week low and 100 day ema at 45400 , indicating extended decline ahead .

• On the daily chart index formed large bear candle and high of Monday at 46400 (also value of 10 and 50 -day ema) would act as key resistance in case of technical pull back ahead

• Going forward, bias continues to remain negative and index is expected to head towards next support zone of 44500 -44300 levels 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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