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Nifty : 22272

Technical Outlook

Day that was… Nifty declined for second session led by global volatility on Monday as IT, banking stocks remained under pressure. Oil&gas, power, metal stocks relatively outperformed. Index closed at 22272, down 246 points or 1.1%

Technical Outlook

* The Nifty started the session with a gap down action (22427-22519) and then failed to make any meaningful recovery, weighed down by IT and banking stocks. Price action formed a bear candle indicating extended profit taking as global volatility weighed on sentiments and breached previous week low after four week rally. On Tuesday we are heading for another gap down led by weak global cues and index is likely to breach immediate support of 22200 contrary to expectations. In near term, for any meaningful recovery, index needs to sustain above previous session high, else bias would remain negative

* Going ahead, we expect current decline to extend towards next key support of 21900, as a part of retracement of past one month rally, followed by a base formation amid stock specific action as earnings season accelerated. Meanwhile, life highs of 22800 to act as key resistance, being value of last week highs and upper band of rising channel

* Structurally, retracement of past month 1000 points rally would lead to higher base formation above rising 50-dema and lower band of the channel around 21900 levels. We believe short term consolidation would act as base for eventual target of 23400 by June 2024

* Our positive bias is further validated by following observations:

o Breadth: The current up move is backed by broad based participation as Percentage of stocks above 50days ema sustain above 60%

o Midcap index has already hit new highs indicating continuation of up move while small cap also expected to follow

* We have revised support base to 21900 as it is confluence of:

A) rising 50 days EMA placed at 22105

B) 80% retracement of current up move (21710-22775), at 22242

C) Lower band of rising channel encompassing past three month rally at 22000

Nifty Bank: 47773

Technical Outlook

Day that was : The Nifty Bank index extended correction on Monday to start the week amid profit taking led by global volatility . Index closed the session at 47773 , down 791 points or 1 .63 %

Technical Outlook :

* The Index began the session with a gap down action and then continued to slide down to end at low points of the day . Index breached last week low for first time in four weeks with an unfilled gap at 48500 which remains key hurdle in the short term . Bias would remain corrective as long as index continues to form lower high -low formation on daily chart . On Tuesday’s weekly expiry session we ar e headed for another gap down, expect intraday bounce back to face with selling pressure

* In the short term, we expect prices to face stiff hurdle at Mondays bearish gap area of 48500 while extended profit taking would take index towards 46500 levels which will help prices to work out of overbought conditions and undergo base formation near key support

* Structurally, index has given a breakout from three month consolidation which has set stage for next leg of up move . Within this phase index has maintained its rhythm of forming higher lows near 52 -week ema indicating continuation of structural uptrend

* We expect index to hold key support at 46500 as it is confluence of :

*  A) 80 . 2 % retracement of recent up move (45828 -49057 )

* B) value of rising 100 -day ema at 46570

* C) Value of rising trendline connecting important swing lows since January 2024 placed at 46600

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