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Nifty : 25415.

Technical Outlook

Day that was..

The Nifty inched upward buoyed by strong global cues amid US Fed rate cut. Nifty gained 38 points to settle weekly expiry session at 25415. However, market breadth remained in favour of declines as Nifty midcap, smallcap declined 0.7% and 1.2%, respectively. Sectorally, financials, consumption remained at forefront while oil & gas extended breather

Technical Outlook:

* The index pared initial gains after recording fresh all time high. As a result, index resolved above four session range. The daily price action resulted into high wave candle carrying higher high-low, indicating positive bias.

* The formation of higher high-low post outcome of Fed rate cues signifies positive bias that makes us reiterate our view of Nifty heading towards 25800 in coming weeks. Hence, buying dips would be the prudent strategy to adopt as strong support is placed at last week lows of 24750 levels.

* Our view is anchored upon following key observations:

* The bank Nifty staged a strong rebound and approached near its life highs. We believe, traction in Bank Nifty would drive Nifty higher as Bank Nifty carries 32% weightage in NIfty

* Liquidity: FIIs have been net buyers in last week. With prospects of rate cuts in US, we expect FII money returning to EM and India stands to benefit significantly. This is incrementally positive with already robust domestic liquidity

* September seasonality favours buying dips: historically, September volatility with average of 3% decline has provided buying opportunity as 3M forward returns have been around 7% with 78% probability

* The buying demand at elevated support base makes us revise support base at psychological mark of 25000 as it is placement of 20 days EMA coincided with 61.8% retracement of recent up move (24753-25611)

Nifty Bank : 53037

Technical Outlook

Day that was :

Nifty Bank index continued its winning streak on Thursday led by private banks to settle at 53037 , up 287 points or 1 % on Wednesday amid weekly expiry

Technical Outlook :

* The Index opened higher and then extended gains in early hours of trade to retest its all time high of 53357 , before profit taking near life highs as prices approached overbought conditions on daily time frame after 6 % rally over past nine sessions . Price action formed a bull candle with higher shadow indicating profit taking at higher levels, while maintaining positive bias and relative outperformance . Only a decisive breach of previous session low would indicate pause in upward momentum

* Going forward, some volatility near life highs may not be ruled out . Only a decisive breach and sustainability above 53300 would lead to extended rally . Meanwhile, we have revised short term support levels to current week lows of 51900 that coincide with rising 20 -day ema

* Private Banks leading PSU peers : Most private banks have undergone base formation over past few weeks and have outperformed PSU peers in current week

* Price structure : Current up leg in BankNifty is of higher magnitude (50369 -53353 ) as compared to previous up leg (49654 -51750 ) indicating improving price structure .

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