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Nifty : 25236

Technical Outlook.

Week that was…

Nifty clocked a fresh All time high of 25263 and settled the week on a buoyant note tracking firm global cues. Nifty settled the week at 25235, up 1.7%. Sectorally, barring FMCG, PSU Bank all major indices ended in green led by IT, Pharma, Oil & Gas, realty

Technical Outlook:

* The index stated the week on a positive note and strengthen further as the week progressed. The weekly price action resulted into a bull candle carrying higher high-low, indicating continuation of upward momentum. In the process, Nifty midcap, small cap recorded fresh All Time High

* 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. Henceforth, 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

* On the sectoral front, IT, Pharma, Consumption are expected to outperform while Metals are poised with favourable risk-reward proposition

* 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 (24100-25268)

Nifty Bank : 51351

Technical Outlook

Day that was :

Nifty Bank inched up ahead of GDP numbers and closed at 51351 , up 198 points or 0 .39 % . NBFCs relatively outperformed benchmark

Technical Outlook :

* The index opened on a positive note and then traded in a very narrow range of 51300 -51450 for rest of the session amid lack of directional bias and momentum

* 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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