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Nifty : 24750

Technical Outlook

Day that was…

The benchmark extended losses over third consecutive session despite positive global cues. Nifty lost 221 points or 0.9% to settle weekly expiry session at 24750. Market breadth turned negative as broader relatively underperformed. Sectorally, barring IT all major indices ended in red dragged by auto, consumer durable, realty

Technical Outlook:

* The index started the session on a subdued note and gradually inched downward as intraday pullbacks were short lived. Daily price action resulted sizable bear candle carrying lower high-low, indicating extended correction.

* The index has approached the lower band of consolidation placed at 24700. In the coming session, key support of 24700 would be the key monitorable as holding above the same (on a closing basis) would keep pullback option open. Failure to do so would lead to extended correction towards 24400. In the process, stock specific action would prevail amid progression of earning season. Meanwhile, past two week’s high of 25200 would continue to act as immediate hurdle for the market.

* Structurally, index has witnessed supportive efforts after correcting 6% from All Time High while sustaining around 50 days EMA. In CY24, on five occasions, after 5-6% correction index has a tendency to form a base in the vicinity of 50 days EMA for next couple of weeks and set the stage for next leg of up move. In the current context, we expect Nifty to maintain this rhythm and hold the key support of 24700 on a closing basis. Only the breach of 24700 would result into extended correction towards 24400 that is based on following observations:

* a) 100 days EMA which has been majorly held since Nov-23 is placed at 24470

*  b) The 80% retracement of Aug-Sept rally (23894-26277) is placed at 24370

*  Crude oil price retreated after facing stiff resistance in 80-82 zone as fears of supply disruptions from the conflict between Israel and Iran appears to be easing out. We expect, crude to consolidate in 72-80 range

Nifty Bank : 51288

Technical Outlook

Day that was :

Mirroring the benchmark move, Nifty Bank index extended breather and settled the session at 51288 , down 1 % . Meanwhile, PSU Bank index settled volatile session on a negative note , down 0 . 5 %

Technical Outlook :

* The index started the session on a negative note and consolidated post initial decline . The daily price action resulted into sizable bear candle, indicating extended correction.

* The index has been sustaining well above its 100 days EMA (placed at 51000 ) coincided with long -term rising support trend line held since Oct -23 , after 8 % decline from All Time High . Going ahead, holding above last two weeks low would keep pullback option open towards 52400 mark . Only a decisive close below 50200 mark would result into extended correction . • Key point to highlight is that, since July -23 , on 4 occasions Bank Nifty has maintained the rhythm of not correcting > 9 % and subsequently undergone base formation for next 2 - 3 weeks before unfolding next leg of up move . In current scenario, with 8 % correction already in place, we expect Bank Nifty to form a base and eventually outperform the Nifty as ratio chart of Banknifty/Nifty has found support from cycle lows and now inching upward.

* PSU bank index is undergoing base formation in the vicinity of 200 days EMA amid oversold condition . Meanwhile, potential of lower interest rates are expected to act as tailwind for banks.

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