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Nifty : 23779

Technical Outlook

Day that was ..

Equity benchmark edged lower tracking rise in crude oil prices amid escalated geopolitical tension. Nifty lost 119 (0.5%) points to settle at 23779. Defying the benchmark move, small caps index continued to outperform. Barring pharma, all other indices ended in red weighed by IT, realty, metal.

Technical Outlook :

•The index continued to drift lower after gap down opening as intraday pullbacks were short lived. As a result, daily price action formed a bear candle carrying lower high-low, indicating prolonged corrective phase.

•The formation of lower high-low after a breakdown from 4 months rising trendline, signifies corrective bias. Going ahead, key support is placed at 23600 being July month low. Meanwhile, a decisive close above previous session high of 23890 is required (which has been missing over past nine sessions) to confirm conclusion of corrective phase and open the door for pullback towards 200 days EMA placed at 24350 in the coming weeks.

•Broader market remained in limelight yet again. Therefore, focus should be on the broader market while Nifty witness subdued traction.

•Structurally, despite ongoing volatility, Nifty continues to maintain higher high-low structure on the larger degree charts, indicating structural uptrend is intact. The index has formed sequential higher bottoms off April low (22182). Each higher base has formed a peculiar pattern of arresting intermediate correction around 61.8% to 80% retracement of prevailing uptrend.

•The current ~1000 points pullback precisely align with the structural rhythm, retracing 80% of Jul-Aug 1150 points rally. We expect index to maintain the same rhythm and form a higher base in coming weeks.

•Historically, two decades data suggest that September has been the volatile month. However, such volatility has paved the way for direction move in subsequent months.

•After Brent crude peaked at $120 in March, intermediate rallies have exhausted around the 80 % retracement of prevailing decline . Following the historical rhythm, the current 80 % mark is placed at 97 which would be the key level to watch out fr. •Key Monitorable US Inflation print

Intraday Rational :

• Trend – Supportive efforts emerged from 80% retracement of last up move

• Levels – Sell around 61.8% retracement of yesterday decline

Nifty Bank : 57088

Technical Outlook

Day that was :

Bank Nifty ended the day on a negative note, at 57088 on back of mixed global cues and rise in brent crude prices.

Technical Outlook :

• The Index started the week on negative note and closed near low point of the day. As a result, the daily price action formed bear candle with lower high lower low, indicating extended correction

• Index continues to hold above 200-day EMA and remains broadly in defined range between 56700 and 58000. Holding key support of 56700 will keep pullback options open towards 58000 levels on the higher side.

• In the process, strong support is placed around 56700 being 200 days EMA .

• The PSU Bank Index formed bear candle support near 200-day EMA indicating buying demand. Going ahead, follow through strength above last week (8658) high would open the door for next leg of up move towards 9100 levels

Intraday Rational :

• Trend - Prolongation of consolidation above 200 days EMA, indicating positive bias

• Levels : Sell around 61.8% retracement of yesterday decline

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