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Nifty :23203

Technical Outlook

Week that was…

Equity benchmarks are on tenterhooks awaiting the inauguration of Donald Trump as the president of the United States for the second time on Monday. The Nifty shredded 108 points to settle at 23,203. The broader market outperformed the benchmark, with A/D ratio of 1.10:1. Sectorally, PSU Bank, Metal and Energy end the week solidly in the green driven by robust gains, However, weakness witnessed the most in IT, Realty and FMCG.

Technical Outlook:

•The Index witnessed a gap-down opening (23,312–23,277) and witnessed profit booking in first half of the session and then traded in a range of 104 points throughout the day. In the process, it formed a Doji candle on weekly time frame signaling indecision. Key point to highlight is that index managed to close where it opened the week where previous week was a large red candle displaying bears were dominant this week signals pause.

•Going ahead, we expect index to regain upward momentum and gradually head towards recent swing high of 24200 in coming months meanwhile key support remains at 22500. Thereby, any decline from hereon should be capitalized to accumulate quality stocks in a staggered manner. Our constructive bias is based on following observations:

•a)The supportive efforts from lower band of long-term rising channel coincided with 52 weeks EMA augurs well for next leg of up move •b) Past four months 12% decline hauled weekly stochastic oscillator in oversold territory (placed at 17), indicating impending pullback

•c) Improving global sentiment on the back of lower-than-expected US inflation data boosted market sentiment consequently US Dollar index after 6 weeks of positive close cooled off and closed in red and 10-year yield bear engulfed the previous weeks candle signaling a breather.

•d) Geopolitical anxiety around Gaza war would settle down post ceasefire announcement between Israel and Hamas.

•e) On the market breadth front we witnessed a positive divergence where in NOV we witnessed the reading in percentage of stocks above 50 DMA was 8 compared to 24 in Thursday’s session, indicating sentiment improvement going ahead. •f)Several heavyweight companies are coming out with the Q3FY25 earnings in coming sessions. Better than expected earnings would boost the market sentiment

•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).

•The broader market outperformed the benchmark index, with the Nifty Midcap and Small Cap indices made a bullish hammer candle stick pattern and closed above 52 Week EMA, demonstrating inherent strength. We believe the index is undergoing secondary correction in a bull market which we have observed on 3 occasions since Covid lows, where price wise average correction has been to the tune of 17% while time wise such correction not lasted for 4-5 months. In current scenario with 15% already in place. Thereby, we expect index to maintain the same rhythm and stage a bounce.

Nifty Bank : 48540

Technical Outlook

Week that was :

The Bank Nifty witnessed a rangebound activity amid volatility and settled the week on a flat note at 48540 , down by 0 . 4 % . Meanwhile, Nifty PSU Bank index outperformed the benchmarks, closing on a positive note at 6294 , up by 3 .43 % .

Technical Outlook :

• The Bank Nifty opened the week with a bearish bias, however it witnessed a bounce from the vicinity of lower band of rising channel and traded in a broader range of 49459 -47898 . The daily price action formed a small bullish candle with long upside wick indicating range -bound movement .

• Going ahead, we expect the Bank Nifty to regain its upward momentum towards 51600 being 61 . 8 % retracement of the recent fall (52888 -47898), however the move towards 51600 would be in a non -linear manner as volatility will remain elevated amid Q 3FY25 of earning season . Meanwhile, any dip from here should be capitalized as buying opportunity in quality stocks in a staggered manner, where the near -term support is placed at 46800 which is 61 . 8 % retracement of Oct -23 to Sept -24 rally (42105 - 54467 ) .

• Structurally, since 2016 , on multiple occasions supportive effort emerged from the vicinity of 100 -week EMA (barring covid fall) . In current scenario, the weekly stochastic oscillator has entered in the oversold territory (placed at 9), indicating impending pullback in coming sessions .

• In tandem with the benchmark index, PSU Bank index experienced a rebound after finding support near the lower band of falling channel . This movement formed a piercing like candle closing the week with a positive momentum . The weekly stochastic oscillator has observed a bullish crossover, indicating extended pullback . Going ahead, we expect the index to continue to form a higher base towards 6700 mark which is 61 . 8 % retracement of Dec -24 fall from (7248 -5866 ) .

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