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Nifty : 21817

Technical Outlook

Day that was… Equity benchmarks pared Monday’s gains as traders turn cautious ahead of US Fed meet outcome to be out on Wednesday and settled the session on a negative note at 21817, down 238 points or 1%. The market breadth turned in favour of declines with A/D ratio of 1:2.4. Sectorally, all major indices ended in red weighed down by IT, FMCG, pharma

Technical Outlook

* The index stared the session on a negative note and gradually drifted downward as the day progressed. The daily price action resulted into bear candle carrying lower high-low, indicating corrective bias. In the process, NSE cash turnover (83000 cr.) remained below one month average (95000 cr.) over second consecutive session, indicating lower participation

* The Nifty has breached below past four session’s low of 21900. Consequently, index settled below 50 days EMA for the first time since Nov-23, indicating near term weakness

* Going ahead, to pause the ongoing corrective bias Nifty need to decisively close above previous session’s high of 21978. Failure to do so would lead to extended correction towards 21700 as it is 61.8% retracement of Jan-Mar up move (21137-22526), placed at 21667

* Structurally, we believe, ongoing consolidation would set the stage for next leg of up move. In the process, we expect large caps to relatively outperform the broader market. Thus, buying on dips would be the prudent strategy to adopt. Meanwhile we expect Nifty midcap and small cap indices to undergo base formation over few weeks

* The Bank Nifty has been showing relative outperformance by forming inside bar while sustaining above 100 days EMA amid oversold conditions, indicating impending pullback in banking stocks. Broadley, we expect Bank Nifty to consolidate in the broad range of 46200 and 47200 in the coming week

Nifty Bank: 46385

Technical Outlook

Day that was : The Nifty Bank extended its decline for eighth session in a row amid market wide corrective phase . PSU bank index declined 1 % while private bank index closed flat . Nifty Bank index closed at 46385 , down 191 points or 0 . 4 %

Technical Outlook

* The Index traded lack -lustre in 46600 -46300 zone on Tuesday amid lack of directional bias and lower trading volumes . Day’s price action remained enclosed within Monday’s high -low, indicating breather after seven session decline led prices to oversold readings (Daily stochastic below 20 ) and support zone of 46000 -46200

* Going forward, we expect index to hold current week low of 46000 and attempt a technical bounce from oversold readings

* Meanwhile, key observation is that Bank Nifty has retraced preceding 6 session rally by 80 % over eight sessions and we expect index to form a higher bottom around support of 46200 -46000 mark .

* On the higher side, 47200 would act as key hurdle on immediate basis which is 50 % retracement of past seven session decline

* Next important support for BankNifty is placed around 46200 mark which we expect to hold as it is confluence of rising 100 -day ema and 80 % retracement of six session rally (45662 -48161 )

* Structurally, index is undergoing a broader consolidation phase since December 2023 which we expect to set stage for next up move . Within this phase index has maintained its rhythm of forming higher lows near 52 - week ema indicating continuation of structural uptrend .

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