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Nifty :23753

Technical Outlook

Day that was…

Equity benchmark snapped five sessions losing streak tracking firm global cues. Nifty ended the session with a gain of 166 points or 0.70%, closing at 23753. The market breadth remained negative with advances at 1130 and declines at 1704. Sectorally, Realty was the top gainer, up by 1.47%, followed by NiftyBank and PSUBank, up by 1.10% and 1.08%, respectively. On the downside, Auto closed marginally down by 0.10%

Technical Outlook:

* The index started the week with a positive gap (23587-23738) and subsequently witnessed a rangebound activity. Consequently, index formed an inside bar pattern within Friday’s sizable bear candle, indicating breather at 200 days EMA (placed at 23690). In the process, the stochastic oscillator gave a bullish crossover while trading in the oversold zone, suggesting the possibility of a rebound. The India VIX dropped by 10.30%, closing at 13.52, indicating reduced volatility.

* Going ahead, follow through strength along with a decisive close above 23900 would confirm pause in downward momentum that open the door for next leg of up move towards 24400 being confluence of 61.8% retracement of current decline (24857-23537) coincided with 50 days EMA placed at 24360. 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 : 51317

Technical Outlook

Day that was:

Bank Nifty took a breather after five days of losing streak . Bank Nifty concluded the sessions at 51317 , up 1 .10 % . Meanwhile, Nifty PVT Bank index relatively underperformed the benchmark by closing positive by 0 .88 %

Technical Outlook:

* The Bank Nifty started the week on a positive note after witnessing a sharp down move in the last week . As a result, the index created an inside bar during Monday’s trading session which indicates indecisiveness . The upcoming session is expected to remain volatile due to monthly expiry .

* Moving ahead, to pause the ongoing corrective phase and witness a meaningful pullback the index need to decisively close above previous sessions high 51629 . Else, 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 (at 8), indicating possibility of a pullback in coming sessions cannot be ruled out .

* Mirroring the benchmark index, Nifty PSU Bank index witnessed a support from the lower levels and observed some intraday pullback . The index created a hammer like candlestick pattern around 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 sizeable pullback

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