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Nifty : 23516

Technical Outlook

Day that was…

Equity benchmarks snapped five sessions winning streak and settled Wednesday’s session at 23516, down 42 points. Market breadth turned in favour of declines with A/D ratio of 1:1.5 as broader market underwent profit booking. Sectorally, financials, IT outperformed while auto, consumption, realty underperformed

Technical Outlook:

* The index concluded volatile session on a flat note wherein Nifty oscillated by 650 points throughout the day. The daily price action formed a bear candle that engulfed Tuesday’s session, indicating breather after recent sharp up move. In the process, Nifty clocked a fresh All Time High of 23664

* The formation of higher peak and trough makes us reiterate our positive stance and expect Nifty to gradually head towards 23800 in coming weeks.

* Key point to highlight is that, the Bank Nifty has clocked a new life time high. We believe, revived traction in Bank Nifty would provide impetus for Nifty to resolve higher as Bank Nifty carries 35% weightage in Nifty

* In the process, temporary breather after 11% rally (from June low) cannot be ruled out. However, such breather should not be construed as negative instead capitalised it as incremental buying opportunity as strong support is placed at 23000.Our positive bias is further validated by following observations: a. Market breadth has shown renewed optimism as stocks above 50-day ema has improvised from 51% just before elections to 88% b. Buoyancy in US markets bodes well for domestic market as it has direct correlation with the developed market

* Structurally, the formation of higher peak and trough signifies elevated buying demand that makes us revise support base at 23000 as it is 20 days EMA

Nifty Bank: 51398

Technical Outlook

Day that was

Nifty Bank extended winning streak to record new highs amid weekly expiry on Wednesday . Nifty Bank index closed at 51398 up 957 points or 1 . 9 % primarily being led by large private banks

Technical Outlook :

* The price action for the day formed strong bull candle with small shadow indicating profit taking at higher levels . Index continued higher high -low and in the process surpassed our short term target of 51133 , indicating acceleration of upmove backed by strong rally in large private banks . Index closed the session above exit poll highs of 51133 in the process

* Going forward, we expect index to continue its upward trajectory and gradually head towards 53000 levels, where current upmove from election day low (46077 ) would equate with previous two major rallies since October 2023 measuring 15 % each

* Key observation is that since October 2023 , each of intermediate correction of 9 % was followed by 15 % rally . We expect same rhythm to be maintained and index to head towards 53000 mark in coming few weeks

* In the process, immediate support is now being raised to 49900 being current week low that coincide with 38 . 2 % retracement of rally from election day lows

* PSU Bank index continues to undergo healthy consolidation in a narrow range amid multiple banks undergoing fund raise . Price structure however remains positive and prospects of lower bond yields may trigger further buying demand for PSU banking stocks in coming months

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