IGI Logo

Nifty :23249

Technical Outlook

Day that was…The equity benchmark index ended the day on a positive note for the second consecutive session, gaining 86 points, up by 0.37%, settling the day at 23249 . The Broader market remained positive with A/D ratio of 2:1 signaling outperformance. Sectorally, Pharma, Oil & Gas, Realty and Healthcare outperformed, while Consumer Durables, Media and IT were the only laggard.

Technical Outlook:

• The Nifty opened on a flat note however, the bulls soon came into action and the index eventually closed with a bullish bias as intraday pullbacks were bought into. As a result, daily price action formed a bull candle for the second consecutive day making a higher-high low, indicating the sustenance of strong market breadth resulting in follow through demand.

• Key point to highlight is that the Nifty witnessed a breakout from falling trendline (drawn connecting the highs of 7 th Jan and 24th Jan), indicating continuation in the bullish momentum. Meanwhile, index has already staged a decent recovery from the lower boundary of the support trendline (drawn connecting the August–November 2024 lows), highlighting supportive efforts at key support zone. Additionally, the daily stochastic oscillator has witnessed a bullish crossover, indicating acceleration in ongoing pullback.

• Going ahead, we expect the benchmark index to surpass the immediate resistance zone of 23300-23400, amid strong market breadth observed in last couple of trading sessions, and eventually head towards the mark of 23700 which is 61.8% retracement mark of the recent fall (24266- 22786). The follow-up buying in next couple of sessions will confirm short term bottom at the recent low of 22786. Meanwhile, on the downside, the 22,500 zone remains a key support as it aligns with the implied target of the recent consolidation breakdown (24,200–23,300) and the 50% retracement of the October 2023–September 2024 rally (18,838–26,277).

• In the process, bouts of volatility cannot be ruled out owing to Union Budget coupled with Q3FY25 earnings of many heavy weight companies which would have bearing on the market.

• On the broader market front, we witnessed a breather in the Nifty Midcap and Small Cap indices, post the strong bullish candle observed in previous trading session, which is a healthy sign for the improving market breadth. The breadth indicator (% of stocks above 50 days SMA of Nifty 500 Universe) has bounced from bearish extreme level of 10. Since covid lows, such an extreme reading leads to short term reversal.

• On the downside, critical support is placed at 22,500 which aligns with the implied target of the recent consolidation breakdown (24,200– 23,300) and coincides with the 50% retracement of the October 2023 to September 2024 rally (18,838–26,277)

Nifty Bank : 49312

Technical Outlook

Day that was : The Bank Nifty continued the bullish momentum for the fourth consecutive session where it settled the day on a positive note at 49312 , up by 0 .30 % . The PVT Banking index mirrored the benchmark move by gaining 0 .16 % . Market breadth remained in favor of bulls as A/D ratio was 2 : 1

Technical Outlook :.

• The Bank Nifty opened gap -up and witnessed rangebound action, however buying pressure remained strong, resulting in the index closing with a bullish bias . The index breached the previous two sessions high and created a small bullish candle with wick on both the end, amid volatility .

• Going ahead, we expect the Bank Nifty to breach the mark of 52 -week EMA at 49650 , which also coincides with the upper end of the ongoing consolidation range (47850 -49650), thus accelerating the up -move, and pushing the index further towards 51600 mark being 61 . 8 % retracement of previous fall (53888 -47844 ) .

• Structurally, over past three weeks, the index has been hovering around the long -term rising trendline (drawn adjoining subsequent lows off jun -22 ) amid oversold conditions, indicating exhaustion on the downward momentum .

• The key point to highlight is that, the daily price action witnessed a follow -through buying post the break out of a falling trendline (joining the highs of Dec -24 and Jan -25 ) which was observed in Wednesday’s trading session . The weekly stochastic oscillator witnessed a bullish crossover, indicating acceleration of the ongoing pullback .

• In tandem with the benchmark index, the Nifty PSU Bank also witnessed a rangebound action where it tested the immediate resistance mark of 6300 and closed marginally on the lower side . However, the daily stochastic oscillator is in bullish zone and this pause should be considered as a buying opportunity to the overall bullish momentum witnessed in last couple of sessions . Going ahead, we expect the index to breach the immediate hurdle of 6300 , which is mark of falling trendline (joining the highs of Dec -24 and Jan -25), sustaining above which will accelerate the pullback towards 6720 being 61 . 8 % retracement mark of the previous fall (7248 -5866 ) .

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631