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Nifty : 24936.

Technical Outlook

Day that was..

The benchmark indices recouped part of the Friday’s losses to start the week on positive note. Nifty gained 84 points or 0.34% to close at 24936 while broader markets continued profit taking as Midcap and Small cap indices declined >0.2% each. FMCG (+2%) was top gaining sector while Oil&Gas, Metal and IT underperformed

Technical Outlook:

* The Nifty commenced the week on soft note, however after initial lows of 24750 made a steady recovery, helped by FMCG and private banking heavyweights. It however maintained lower high-low indicating continuation of corrective bias. For index to signal pause in corrective bias, it has to start forming higher high-low sequence

* Going forward, we expect last week highs of 25300 to act as strong hurdle in coming week and Nifty to undergo retracement of Aug-Sept rally (23893-25333) as prices reached overbought readings. Meanwhile stock specific action may continue with key support for index at 24500 levels, where supportive efforts are expected to emerge, which is value of rising 50-day ema and 61.8% retracement of Aug-Sept rally. Our view is anchored upon following key observations:

* a) Historically, September has been a month with elevated volatility both domestically and globally. With Nifty already witnessing three-week rally, we expect markets to witness bouts of volatility and undergo short term corrective phase. From structural point of view, this will only make long term trend healthy

* b) Brent prices were down 7% during last week as fear of slowdown and higher US production weighed on sentiment. Prices are at the cusp of break down from past eight-month triangular consolidation

* c) Over past 10 sessions, on 70% occasions breadth was in favour of declines indicating profit taking after a good run up. This may continue for next few sessions

Nifty Bank : 51117

Technical Outlook

Day that was :

Nifty Bank posted a sharp recovery on Monday led by private banks thereby outperforming Nifty for the day . Index gained 541 points or 1 .07 % to close at 51117

Technical Outlook :

* The session began on a weak note however index recovered after first 30 minutes of trade and then continued to garner strength as the session progressed as buying demand emerged at lower levels . However, for a meaningful recovery index needs to sustain above Fridays high of 51400 , else consolidation to continue

* Meanwhile, short term support is now being revised to 50000 levels being a psychological mark and 80 % retracement of August – September gains

* PSU banking index has remained under pressure over past couple of sessions . On medium term charts, although index has approached oversold readings and therefore a technical bounce is likely in coming weeks

* Price structure : A) We observe that index is forming sequential lower highs indicating continuation of corrective phase since early July which is seen as retracement of post election rally 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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