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Nifty : 25280

Technical Outlook

Day that was…

The index witnessed a lacklustre session amid mixed global cues. Nifty settled the session tad above Monday’s close at 25280. Market breadth turned positive as broader market relatively underperformed. Sectorally, financials, consumer discretionary remained at forefront while metal and Oil & Gas took a breather

Technical Outlook:

* The index traded in a narrow range throughout the session that consequently resulted into inside bar, indicating slowdown in momentum after 14 session upmove. In the process, stock specific action prevailed. As a result, index extended its winning streak over 14th session in a row which is longest in past three decades.

* In the coming weeks we expect volatility to surge led by seasonality and global cues. While our structural stance is positive, the move towards 25800 would be in a non linear manner amid short term overbought conditions owing to past 14 consecutive sessions up move. Hence, buying dips would be the prudent strategy to adopt as immediate support is placed at 24700. Only a decisive close below previous session lows, would signal pause in upward momentum and retracement of recent rally can not be ruled out. 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 strong uptrend. Domestic market has direct relationship with the developed markets 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

* 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. Hence, we revise support base at 24700 as it is confluence of 20 days EMA coincided with 50% retracement of ongoing up move (24100-25333)

Nifty Bank : 51689

Technical Outlook

Day that was :

Nifty Bank maintained its winning streak on Tuesday led by two heavyweight private banks, while main price action remained focused in NBFC and Insurance space . Index closed the session at 51689 up 249 points or 0 .49 %

Technical Outlook :

* The index commenced the session on muted note and spent most part within Mondays range, before last hour surge led index to one month high . In the process index formed a bull candle with higher high -low maintaining positive bias . It may however be noted that current upmove is slow and expected to face some selling pressure at higher levels . Global cues would be source of volatility

* Short term trend for the inde x 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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