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Nifty : 24998

Technical Outlook

Day that was…

Equity benchmark settled the session on positive note buoyed by US rate cut expectation. Nifty gained 16 points to settle the session at 24998. The market breadth remained positive. Sectorally, banking lead the show while IT, pharma witnessed profit booking

Technical Outlook:

* Nifty consolidated in a narrow range after initial up move and formed an inside bar, indicating breather amid stock specific action ahead of US inflation print.

* Going ahead, sustainability above 50 days EMA placed around 25000 mark would help index to revive upward momentum and open the door for pullback towards 25500 in coming weeks. In the process, volatility to remain high amidst development of ongoing geopolitical concerns coupled with start of Q2FY25 earning season which would dictate the further trend.

* Structurally, On expected lines, supportive efforts emerged from 50 days EMA after 6% correction. In CY24, on five occasions, after 5-6% correction index has undergone base formation in the vicinity of 50 days EMA for next couple of weeks and set the stage for next leg of up move. Thereby, holding key support of 24800 on a closing basis would keep pullback option open. Only a decisive close below 24800 due to escalation of geopolitical tension would result into extended correction wherein Nifty would find its feet around 24400 as it is confluence of:

* a) 100 days EMA which has been majorly held since Nov-23 is placed at 24384

* b) The 80% retracement of Aug-Sept rally (23894-26277) is placed at 24370

Nifty Bank : 51531

Technical Outlook

Day that was :

Nifty Bank index relatively outshone the benchmark and concluded the session at 51530 , up 1 % as US rate cut expectation boosted market sentiment . In the process, PSU Bank index relatively underperformed by losing 0 . 3 %

Technical Outlook :

* The index started the session on a positive note and endured its northbound journey as the day progressed . As a result, daily price action formed a bull candle, Indicating positive bias

* The sequence of higher lows buying demand at elevated support base signifies strength after bouncing from 100 days EMA . Key point to highlight is that, Bank Nifty has maintained the rhythm of not correcting more than 9 % in CY24 . In CY24 , after 9 % correction, index has a tendency to undergo a base formation before witnessing next leg of up move .

* Going ahead, sustainability above 51000 mark would confirm pause in downward momentum that would lead to extended pullback towards 52400 . In the process, current week’s low of 50200 would continue to act as immediate support .

* PSU bank index is undergoing base formation in the vicinity of 200 days EMA amid oversold condition . Apart from technical oversold conditions, potential of lower interest rates are expected to act as tailwind for banks

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