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Nifty : 19742

Technical Outlook

* The index opened with a another gap down (19948-19901) and formed a lower high-low indicating accelerated decline below 19900 levels which would also act as immediate hurdle in the short term. Index need to form a higher highlow on daily time frame to indicate pause in down ward momentum and meaningful gains

* Going forward we expect Nifty to find key support in the 19600-19500 zone and undergo healthy consolidation in the broad range of 19500-20200.

* Structurally ongoing decline is part of the healthy retracement of past three week rally (19223-20222) and should not be construed as negative rather a buying opportunity

* On the broader market front, Midcap index has rallied >40% over past six months and currently undergoing a healthy retracement. In a secular bull market secondary correction is a common phenomenon wherein historically 8-10% corrections in midcap index provided incremental buying opportunity. Therefore, temporary breather/consolidation would make market healthier from medium term perspective

* Key support base at 19600-19500 is confluence of:

* a) 61.8% retracement of current up move (19223-20222), at 19605

* b) Presence of rising 50-day ema at 19550 and

* C) value of rising trendline connecting key swing lows of June and August 2023

Nifty Bank: 44623

Technical Outlook

* The price action for the day formed a strong bear candle carrying lower high -low and second bearish gap in as many days indicating extended profit booking as index breached 45000 mark contrary to our expectations

* We expect pause in current selling and supportive efforts to emerge in 44000 -44200 zone however index need to form a higher high -low on daily chart to indicate pause in downward pressure and meaningful reversal as Thursdays high at 45200 would act as immediate hurdle

* Structurally, Index has retraced past four week rally by 61 . 8 % this week leading daily stochastic close to oversold readings .

* Our view is backed by following key observations

* On higher degree, index is consolidating in a broad range of 43600 -46300 since early August as it is digesting strong rally from March lows of 38613

* PSU banks continue to relatively outperform and could lend some support at lower levels

* Heavy weight private banks including HDFC bank are now oversold and back to their key supports thereby projecting limited downside

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