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Nifty : 24406

Technical Outlook

Day that was…

Equity benchmarks concluded the monthly expiry session on a flat note tracking muted global cues. The Nifty settled the session at 24406, down 7 points. Sectorally, Oil & Gas, Auto, pharma remained in limelight while metal, financials, consumption extended breather

Technical Outlook:

* The index witnessed a gap down opening (24413-24230). However, supportive efforts from 20 days EMA helped index to recouped intraday losses and settle the session on a flat note. The daily price action formed a bull candle carrying lower high – low, indicating supportive efforts at elevated levels

* The index is undergoing healthy retracement where, supportive efforts emerged from 20 days EMA. Going ahead, holding psychological mark of 24000 would help index to stage a bounce towards upper band of consolidation placed at 24700. In the process, stock specific action with sector rotation would prevail amid progression of Q1FY25 earrings and development of global cues

*  On the broader market front, Nifty Midcap and Small cap indices have taken a breather after rallying 23% and 28% respectively off election outcome day low which hauled weekly stochastic oscillator in overbought territory, suggesting extended breather in the broader market which has historically offered incremental buying opportunity in quality stocks

* Structurally, the formation of higher peak and trough signifies supportive efforts at elevated support base. As a result, strong support is placed at 24000 as it is confluence of:

* A) 61.8% retracement of past four weeks up moves 23350- 24854)

* B) July Month’s low is placed at 23993

Nifty Bank : 50889

Technical Outlook

Day that was :

Nifty Bank continued its decline on Thursday as profit taking continued in index heavyweights amid disappointment of some earnings . Bank Nifty retreated 428 points or 0 . 8 % to settle at 50889

Technical Outlook :

* The Index breached psychological mark of 51000 and continued lower high -low sequence on Thursday indicating negative bias . It should be however noted that after 5 % decline daily stochastics is approaching oversold conditions and therefore intraday pull back may not be ruled out .

* Going forward, bias will continue to be negative as long as index forms lower high -low formation with 52000 being key resistance in the short term, while key support is placed at 49600 which is confluence of a) 50 % retracement of post election rally and b) value of rising 100 -day ema

* Price structure : We observe that index is undergoing retracement from overbought readings after 15 % rally . Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 9 % from highs and in current context 5 % correction is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a higher bottom formation as against election day low

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