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Nifty :23727

Technical Outlook

Day that was…

Equity benchmark extended breather over second consecutive session amid weakness in Indian Rupee. Nifty closed -26 points or -0.11%, closing at 23727. The market breadth remained flat with advances at 1443 and declines at 1334. Sectorally, Auto was the top gainer, up by 0.57%, followed by FMCG and OIL & GAS, up by 0.54% respectively. On the downside, Metal declined by 0.83%, and PSU Bank closed down by 0.56%

Technical Outlook:

* Nifty inched upward in the initial part of the session. However, lack of follow through strength resulted into decline in the second half. As a result, index traded in Friday’s trading range over second session in a row which has taken a shape of an inside bar, indicating rangebound activity while trading above its 200-Day Exponential Moving Average (EMA). Despite subdued activity, the India VIX dropped by 2.53%, closing at 13.18.

* Key point to highlight is that, after 1250 points decline in last week index has taken a breather and now daily stochastic oscillator gave a prominent bullish crossover while hovering in oversold zone, suggesting a possible bounce in coming sessions. However, for a meaningful pullback to materialize Nifty need to decisively close above 23900 that would open the door for extended pullback towards 24400 in coming weeks as it is confluence of 61.8% retracement of current decline (24857-23537) coincided with 50 days EMA placed at 24335. Failure to do so, would lead to extended correction wherein next support is placed at 23200. In the process, we expect volatility would remain elevated tracking monthly expiry coupled with global development. Thus, stock centric approach would remain in focus.

* On the broader market front, Nifty midcap and small cap indices have extended breather while sustaining above its 100 days EMA. We expect, broader market to prolong the ongoing healthy retracement that would set the stage for next leg of up move

* Only the breach below immediate support of 23200 would result into extended correction towards key support threshold of 22900 as it is 123.6% external retracement of recent up move 23263-24857 that coincided with lower band of past 2 and half years rising channel

Nifty Bank : 51233

Technical Outlook

Day that was:

Bank Nifty extended the breather from the previous session where it concluded the sessions at 51233 , down 0 .16 % . Meanwhile, Nifty PSU Bank index relatively underperformed the benchmark by closing negative by 0 .56 %

Technical Outlook:

* The Bank Nifty witnessed a lackluster session where it observed rangebound movement wherein it oscillated within the range of 245 points throughout the day and closed the day marginally in red . As a result, the index created an inside bar pattern for the second straight session indicating a pause in downward momentum .

* Moving ahead, for a meaningful pullback to materialize the index need to decisively close above Friday’s swing high which is around 51600 . Failure to do so, will result in continuation of corrective bias wherein next key support is placed at 49700 mark, which is placed near 52 -week EMA, coinciding with 61 . 8 % retracement of previous up -move (46077 -54467 ) . Meanwhile, on the upside the 50 % retracement mark of the current fall at 52200 (53888 - 50609 ) would act as immediate resistance .

* Key point to highlight is that, the last weeks >3100 points correction hauled daily stochastic oscillator in oversold territory, which has now observed a bullish crossover indicating a possibility of pullback in coming sessions .

* Mirroring the benchmark index, Nifty PSU Bank index observed rangebound movement, while experiencing significant volatility in that confined range . The index consolidated for the second session near 61 . 8 % retracement mark of the previous up -move(6163 -7248), coinciding with 52 -week EMA . Moving ahead, the previous sessions high of 7097 will be key level to watch -out for, sustenance above which would trigger a meaningful pullback .

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