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Nifty : 24986

Technical Outlook

Week that was ..

Equity benchmark experienced a remarkable surge, driven by a sharp decline in crude oil prices following the US midterm election results. The Nifty index soared by 8.5% during the week, marking its strongest weekly gains since February 2021, and settled at 25030. While the broader market underperformed, the Nifty Midcap and Small Cap indices climbed by ~6% and ~3%, respectively. All major indices closed in the green, propelled by gains in the financial, auto, and realty sectors.

Technical Outlook :

• Index started the eventful week with a positive gap and gradually marched upward. As a result, index formed a sizable bull candle, indicating an acceleration of the upward momentum.

• The index also logged a decisive breakout from an eight-month falling trend line, confirming the end of the corrective phase and suggesting the resumption of an uptrend. We expect, Nifty to continue its upward journey and head towards 25,500 in the coming weeks. However, this move will not be linear as past two weeks' rally of approximately 2,500 points pushed short-term momentum oscillators into overbought territory, indicating possibility of temporary breather at higher levels can not be ruled out. Such a breather would make market healthy and pave the way for the next leg of the up move

• Our constructive bias is further supported by several key observations

• The Nifty maintained its rhythm by arresting the corrective phase after limiting an eight-week losing streak and defending the long-term 200-week EMA, which coincided with the April 26 lows of 22,182. This bounce has confirmed the formation of a double-bottom pattern on the weekly chart.

• Over the past two weeks, the index has entirely recovered from its 12-week decline (24,774 to 22,180). This swift retracement signals a structural turnaround, opening the door for the next leg of the up move.

• The Indian market had lagged behind its global counterparts due to AIdriven momentum. However, the recent global sell-off in AI-driven stocks could provide a supportive tailwind for the growth-oriented Indian market. FII have seen strongest inflow of ~32,000 crore in just the first week of November.

• Mirroring the benchmark move, Bank Nifty has also experienced a faster retracement, recouping its 17-week decline in just two weeks. The structural shift in the banking sector, which carries 37% weightage in the Nifty, will likely drive the Nifty higher.

• There has been a significant improvement in the market breadth of the Nifty 50 universe. The percentage of stocks above the 200-day SMA has increased from 16% ten days ago to 58%. This substantial improvement bodes well for the continuation of the ongoing rally.

• A decline in crude oil prices and a cooling off in US 10-Year Bond Yields will further support the rally. Any dips from hereon should be viewed as incremental opportunity to accumulate high-quality stocks backed by strong earnings.

• The US midterm election results represent a critical near-term trigger. Historical data from the past 11 occurrences since 1982 indicate that, on six occasions, the Sensex garnered an average positive return of 12%

• The formation of higher highs and lows signifies a strong price structure that makes us revise the support base upward to 24300.

Intraday Rational :

• Trend – Formation of higher high low signifies positive bias

• Levels – Buy around 50% retracement of 2 days range

Nifty Bank : 58850

Technical Outlook

Week that was :

Bank Nifty ended the week on a strong note, up 8.04% at 59086 levels. Meanwhile, the Nifty PSU Bank relatively underperformed by gaining 4.6% for the day.

Technical Outlook :

• Index started the eventful week with a positive gap and gradually marched upward. As a result, weekly price action formed a sizable bull candle, indicating an acceleration of the upward momentum.

• Bank Nifty has also experienced a faster retracement, recouping its 17-week decline in just two weeks. With past nine session 10% upmove, daily Stochastic Oscillator approached overbought condition (placed at 98). Consequently, a couple of days breather at higher levels cannot be entirely ruled out.

• Eventually, we expect index to resolve higher and extend the move towards 60200 being March 2026 highs.

• The formation of higher high-low signifies positive momentum that makes us revise support bae upward at 57700 being 80% retracement of current up move (56718- 59244)

• Nifty PSU Bank Index has witnessed 8-months falling trendline breakout after forming a higher base above 52- week EMA that has been majorly held since May-25.Going ahead we expect it to head towards 9100 levels being 61.8% retracement of entire decline

• Intraday Rational :

• Trend - Robust recovery from key support of 53800 confirms strong support zone

• Levels : Buy around 50% retracement of 2 days range.

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