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Nifty : 25198

Technical Outlook

Day that was…

The index snapped fourteen session winning streak led by global volatility on Wednesday as concerns around US growth weighed on sentiments. Market breadth was flat indicating selective stock performance. IT and upstream oil companies underperformed while Pharma, consumption stocks performed better

Technical Outlook:

* The index started the session with a gap down led by global volatility as prices reacted from overbought trajectory after 14 session gain. Indian equities however relatively outshone global peers. In the process index formed a small bull candle with lower high-low and close below previous session low for first time in three weeks indicating pause in upward momentum after 14 session rally

* In the coming weeks we expect index to consolidate amid bouts of volatility, seasonality impact and overbought readings on short term charts. 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 : 51400

Technical Outlook

Day that was :

Nifty Bank declined on Wednesday led by global volatility and amid weekly expiry to snap four day winning streak . Index closed the session at 51400 down 289 points or 0 .56 %

Technical Outlook :

* The index commenced Wednesdays session on a negative note tracking weak global cues, however held 51250 being previous three session’s low and 10 -day ema, followed by lackluster move for rest of the day . Price action thus formed an inside bar that indicate pause in upward momentum amid global 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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