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Nifty : 25145

Technical Outlook

Day that was…

The market remained focused on stock specific action while headline Nifty index traded rudderless extending profit taking mode. Nifty closed the session at 25145, down 53 points

Technical Outlook:

* The index started the session on a firm note, however index surrendered opening gains amid lack of directional triggers domestically or from global markets. Nifty settled lower for second session indicating extended breather and formed a narrow range bear candle as prices had approached overbought readings and RSI flagging waning upward momentum

* In the coming weeks, we expect index to consolidate amid bouts of volatility, seasonality impact and overbought readings on short term charts. While our structural stance is positive, the move towards 25800 would be in a non linear manner amid short term overbought conditions owing to past 14 consecutive sessions up move. Hence, buying dips would be the prudent strategy to adopt as immediate support is placed at 24700. 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 strong uptrend. Domestic market has direct relationship with the developed markets

* 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

* 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- 25333)

Nifty Bank : 51473

Technical Outlook

Day that was :

Nifty Bank eked out marginal gains amid lackluster and low volume trading session . Index closed the session at 51473 , up 73 points

Technical Outlook :

* The session began on flattish note led by muted global cues . Inde x surrendered initial gains while staying in a narrow range of 51400 -51500 for entire session . As a result price action remained contained within Tuesdays bull candle indicating extended breather amid bouts of global volatility

* 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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