IGI Logo

Nifty : 25418

Technical Outlook

Day that was..

The Nifty continued with its lackluster session over third consecutive session ahead of US Fed meet. Nifty gained 35 points to settle the session at 25418. The market breadth turned in favour of declines as broader market relatively underperformed. Sectorally, Consumption, auto outshone while Metal, PSU Banks took a breather

Technical Outlook:

• The formation of doji candle over third consecutive session signifies pause in upward momentum after recent sharp up move.

• The breather after recent sharp up move signifies healthy consolidation amid stock specific action. However, broader structure remains positive which makes us maintain our positive bias and expect Nifty to gradually head towards 25800. Meanwhile, volatility around Fed Meeting cannot be ruled out, we advise to deploy buy on dips approach as strong support is placed at last week lows of 24750 levels.

• Our view is anchored upon following key observations:

• Private banks showing signs of strength follow through strength post inverted Head & Shoulder breakout

• Liquidity: FIIs have been net buyers in last week. With prospects of rate cuts in US, we expect FII money returning to EM and India stands to benefit significantly. This is incrementally positive with already robust domestic liquidity

• September seasonality favours buying dips: historically, September volatility with average of 3% decline has provided buying opportunity as 3M forward returns have been around 7% with 78% probability

• Brent: Prices continue their down trend after breakdown from one year consolidation. Expect prices to head towards $67 over coming months while upsides capped at $80

Nifty Bank : 52188

Technical Outlook

Day that was :

Nifty Bank eked out marginal gains on Tuesday continuing winning streak . Index gained 35 points to close at 52188

Technical Outlook :

• The Index traded rudderless in a vary narrow range (52250 - 52150 ) for entire session while maintaining positive bias with higher high -low sequence on daily time frame . Overall index has led over past few sessions after a breakout from inverse H&S pattern las week and remains in upward trajectory . In the coming session, weekly expiry related moves will be in focus

• Going forward, we expect Index to head towards 52600 which is 80 % retracement of July -August decline (53357 - 49655 ) . Meanwhile, we have revised short term support levels to last Wednesday lows around 51000 that coincide with rising 50 -day ema

• Private Banks leading PSU peers, Most private banks have undergone base formation over past few weeks and expected to outperform PSU peers

• Price structure : A) With Thursdays up move index is forming a higher bottom as compared to August lows and poised for a breakout from bullish reversal pattern indicating further upsides B) Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 8 - 9 % from highs resulting in higher bottom . In current context, index corrected 7 % from highs and retraced post election five week rally by 50 % over 10 weeks indicating slow retracement and robust price structure

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631