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Nifty : 25013

Technical Outlook

Day that was…

Equity benchmark snapped six session losing streak and settled Tuesdays session at 25013, up 217 points or 0.9% tracking state election outcome. The market breadth turned positive with A/D ratio of 4:1 as broader market relatively outperformed. Sectorally, financials, auto, pharma outshone while metal took a breather after recent sharp up move

Technical Outlook:

* Nifty maintained the rhythm of not correcting for more than 6 consecutive sessions while correcting to the tune of 6%. As a result, supportive efforts emerged in the vicinity of 50 days EMA amid oversold conditions. The index staged a strong rebound after initial blip and gradually inched upward as intraday dips were bought into while discounting state election outcome. The daily price action resulted into Bullish Harami candle confined within Monday’s bear candle, indicating pause in downward momentum.

* Going ahead, for a meaningful pullback to materialize, index need witness follow through strength along with a decisive close above previous session’s high (25044) that would open the door for up move towards 25500 in coming weeks. In the process, volatility to remain high amidst development on ongoing geopolitical concerns coupled with RBI Policy outcome and start of Q2FY25 earning season which would further dictate the trend.

* On the global marco front, crude oil would be the key monitorable amid escalation of geopolitical worries. The current up move appears to be more of technical pullback from oversold territory. We expect, it to face stiff resistance at 82 zone

* The supportive efforts at immediate support of 24800 highlights inherent strength. However, any decline below 24800 (on a closing basis) due to escalation of geopolitical tension would result into extended correction wherein Nifty would find its feet around 24400 as it is confluence of:

* a) 100 days EMA which has been majorly held since Nov-23 is placed at 24384 • b) The 80% retracement of Aug-Sept rally (23894-26277) is placed at 24370

Nifty Bank : 51021

Technical Outlook

Day that was :

Nifty Bank index snapped six days losing streak and settled the session on a positive note while discounting state election outcome . Index settled the session at 51021 , up 1 % . Mirroring the benchmark move, PSU bank index gained 1 .35 %

Technical Outlook :

* The supportive efforts from 100 days EMA helped index to recover some of last session’s losses . Consequently, daily price action resulted into inside bar that confined within Monday’s bear candle, which is also know as Bullish Harami candle, indicating pause in downward momentum

* On expected lines, Bank Nifty maintained the rhythm of not correcting more than 9 % in CY24 . Going ahead, follow through strength above previous sessions high (on a closing basis) would confirm pause in downward momentum that would open the door for pullback towards 52400 . In the process, Monday’s low of 50200 would continue to act as immediate support .

* PSU bank index is hovering around key support and expected to attract supportive efforts near their long term mean . Apart from technical oversold conditions, potential of lower interest rates are expected to act as tailwind for banks

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