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Nifty : 24142

Technical Outlook

Day that was…

Equity benchmarks started the week on a positive note and settled the session at 24142, up 131 points. The market breadth turned positive with A/D ratio of 2.5:1 as broader market relatively outperformed. Sectorally, IT, financials remained in limelight while PSU Banks, realty took a breather

Technical Outlook:

* The index started the session on a flat note. However, buying demand from Friday’s low helped index to recouped last sessions losses. The daily price action resulted into sizable bull candle carrying higher low, indicating continuation positive momentum

* Going ahead, we expect Nifty to consolidate in the broader range of 24400-23600 with a positive bias wherein stock specific action would prevail. Key point to highlight is that, currently Nifty has rallied 14% (off Election outcome day low) which has hauled daily and weekly stochastic oscillator in overbought territory (placed at 88 and 95, respectively). Thus, any temporary breather at higher levels should not be construed as negative instead buying dips would be the prudent strategy to adopt as strong support is placed at 23600

* In the month of July, markets will look for further direction from Union Budget announcements, progression of Monsoon and inflation expectations and Q1FY25 earnings. From the seasonality perspective, July has produced positive returns in 80% occasions over past two decades and similar probability of positive returns is observed even in past five election years spanning two decades wherein budget related expectations tend to weigh on sentiments. Average returns for July has been >2%

* Structurally, the formation of higher peak and trough signifies elevated buying demand that makes us revise support base at 23600 as it is 20 days EMA coincided with 61.8% retracement of past four sessions up move

Nifty Bank: 52574

Technical Outlook

Day that was :

Nifty Bank index snapped two day losing streak to settle higher on Monday ahead of quarterly earnings update by banks . Index closed at 52574 , up 0 .44 % or 232 points

Technical Outlook :

* The session began on a muted note while index garnered support near 52100 mark and settled higher led by private banks . Price action however remained in narrow range and formed lower high -low , a sign of extended breather after sharp rally over past three weeks led prices to overbought reading, both on daily and weekly time frame

* Going forward, we expect index to retrace recent gains and consolidate in the range of 51000 -53500 amid positive bias . Hence strategy should be to buy dips

* PSU banking stocks have witnessed good profit taking/consolidation over few weeks and could garner buying demand over next few sessions from daily oversold readings

* Meanwhile, we expect index to hold 51000 levels as it is confluence of last week low and value of rising 20 -day ema (50928 )

* Price structure : Index has held its rising 52 -week EMA on numerous occasions since COVID and more recently on election outcome day . We believe major bottom has been made at 46077 . We also observe that index is maintaining its higher high -low formation on multiple time frames and remain in steady uptrend . Important point to note is that PSU banks are undergoing healthy higher base formation in the meanwhile while maintaining their positive price structure from medium term perspective

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