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Nifty : 25278

Technical Outlook

Day that was…

The index endured its record setting spree and settled the session at 25279, up 42 points. However, market breadth turned negative with A/D ratio of 1:1.4 as broader market relatively underperformed. Sectorally, FMCG, IT, PSU Bank outshone while pharma, metal took a breather

Technical Outlook:

* The index stated the week on a positive note. However, lack of follow through strength resulted into rangebound activity throughout the day. The daily price action formed a small bear candle carrying higher highlow, indicating continuation of upward momentum.

* The index continued with its winning streak over 13th session in a row. The strongest winning streak in three decade signifies rejuvenated uptrend that makes us revise target to 25800 in coming month. However, the move towards 25800 would be in a non linear manner amid short term overbought conditions. Hence, buying dips would be the prudent strategy to adopt as strong support is placed at 24700 which we expect to hold. Only a decisive close below previous session lows, would signal pause in upward momentum and retracement of recent rally can not be ruled out. Our overall bullish stance is backed by: a)The current up move is backed by improvement in multi sector participation. We expect short term sectoral rotation to provide cushion b)Global headline indices, led by US are in steady uptrend. From directional perspective, continuation of global risk-on environment would lead to bullish spill over barring transitional volatility episodes c)Continued strong domestic fund flows provide depth for markets while prospects of lower interest rates in US raise prospects of incremental FII flow going ahead •Market breadth for the week was flat as some profit taking in Mid and small cap segment was visible at new highs. We expect retracement of recent rally to pan out amid sectoral rotation

* Structurally, retracement of the rally is a normal phenomenon amid bull market and offers an incremental opportunity to buy. We believe over next few weeks, such retracement would offer buying opportunity from long term trend perspective. Hence we revise support base at 24700 as it is confluence of 20 days EMA coincided with 50% retracement of ongoing up move (24100-25333)

Nifty Bank : 51439

Technical Outlook

Day that was :

Nifty Bank continued its winning streak on Monday to close at 51439 , up 88 points

Technical Outlook :

* The index continued its upward trajectory with higher high -low amid buying in private sector heavy weights . Index traded above 51300 for entire session thereby holding Fridays low

* Short term trend for the inde x remains positive with higher high -low sequence on weekly time frame . We maintain positive stance and expect index to gradually head towards 51800 levels . Hence, buying dips will be a prudent strategy . Meanwhile, short term support is placed at 50300 which is confluence of a) 61 . 8 % retracement of past three week gains, b) past two week low

* Price structure : A) We observe that index is undergoing healthy base formation after 7 % correction from life highs . Currently, index has retraced, post election, 21 session rally by 50 % and undergoing bottom formation near 100 - day ema

* B) Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 8 - 9 % from highs and in current context 7 % decline is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a strong bottom formation around 200 -day ema around 48500 levels

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