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Nifty : 24531

Technical Outlook

Week that was…

Equity benchmarks endured its northbound journey over seventh consecutive week and clocked a fresh all time high of 24854. The Nifty settled the truncated week at 24531, up 0.1%. Broader markets snapped six weeks winning streak as Nifty midcap and small cap indices dropped 2% for the week. Sectorally, IT, FMCG, PSU Banks remained in limelight while metal and PSU’s relatively underperformed

Technical Outlook:

* In line with our view, Nifty resolved higher and approached our target of 24700. Subsequently index pared initial gains and settled truncated week on a flat note. As a result, weekly price action resembles a Shooting Star candlestick pattern, indicating that the velocity of the upward momentum is fading away after 17% rally seen over past seven weeks that resulted into overbought condition

* In the upcoming eventful week, we expect Nifty to consolidate in 24700-24000 wherein volatility would remain elevated amidst Union Budget coupled with monthly expiry. Thus, only a sustenance above 24700 post Union Budget outcome would open the door for next leg of up move. Failure to do so would lead to prolongation of consolidation amid progression of Q1FY25 earning season which would eventually make market healthy. Following are the key monitorable for the upcoming week:

* A) Budget outcome would dictate further course of action

* B) Many Index heavy weights are lined up with their Q1FY25 earnings which would have bearing on the market movement

* C)On the domestic broader market front, Nifty Midcap and Small cap indices have taken a breather after rallying 23% and 28% respectively off election outcome day low which hauled weekly stochastic oscillator in overbought territory, suggesting extended breather temporary breather wherein possibility of 5-7% correction in the broader market cannot be ruled out which has historically offered incremental buying opportunity in quality stocks

* Structurally, the formation of higher peak and trough signifies supportive efforts at elevated support base. As a result, strong support is placed at 24000 as it is confluence of:

* A) 61.8% retracement of past four weeks up moves 23350-24854

* B) July Month’s low is placed at 23993

Nifty Bank: 52265

Technical Outlook

Week that was :

Nifty Bank index ended the last week on a flat note after trading in a narrow range . PSU bank index gained 1 % while private bank index closed marginally negative ahead of key earnings . Bank Nifty closed the week at 52265 , down just 13 points

Technical Outlook :

* The Index failed to surpass multiple times above 52800 levels over past two weeks and traded rudder less indicating extended consolidation after prices approached over bought territory ahead of key earnings and Union Budget .

* Going forward, we expect index to consolidate in the broad range of 52800 and 51500 levels amid elevated volatility, while Union budget would provide further directional bias .

* We expect 51500 to act as support as it is value of rising 50 - day average and higher bottom post elections outcome • PSU banking stocks have witnessed some value buying last week after underperforming for few weeks . We believe higher bottom formation is made by PSU banking stocks ahead of earnings and eventually expected to head higher • We revise short term support to last week’s low of 52000 which also coincide with rising 21 -day ema

* Price structure : We observe that index is maintaining its higher high -low formation on multiple time frames and remain in steady uptrend and short term declines are attracting buying support . Hence consolidation in the short term will help index to undergo higher base formation and work out of overbought readings

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