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Nifty : 22489

Technical Outlook

Day that was…

Equity benchmarks extended losses over fifth consecutive session tracking weak global cues coupled with continuous FII's sell-off. Nifty settled monthly expiry session at 22489, down 216 points or 0.95%. The market breadth remained in favour of declines with A/D ratio of 1:2.5 as the broader market relatively underperformed the benchmark. Sectorally, barring financials all other indices ended in red weighed by IT, pharma, auto, metal

Technical Outlook:

• The index started the session on a negative note and continued to inch southward as the intraday pullback were short lived. Consequently, daily price action resulted into sizable bear candle carrying lower high-low, indicating extended correction after recent sharp up move

• Going ahead, to pause the ongoing corrective move, index need to form a higher high-low formation, else extended correction amid rise in volatility ahead of the General election outcome. In the process, strong support is placed at 22100 which we expect to hold as holding above the same would keep pullback options open

• However, we believe, the focus should be on big picture, as we are in structural uptrend. The anxiety will subside post event and markets will follow its structural up trend. Retracement of rally would thus provide a buying opportunity and therefore investors should focus on accumulating quality stock from medium term perspective. Our broader positive stance is corroborated by following observations:

• A) The index is undergoing secondary correction after witnessing faster retracement wherein it entirely retraced past nine weeks consolidation (22800-21700) in just two weeks that bodes well for extension of ongoing up move

• B) In sync with the historical evidences, Nifty staged a strong rebound post 5% correction and clocked a new high, highlighting robust price structure. Empirically, index has corrected ~6% during polling phase of past four elections and eventually hit new highs around election outcome on three occasions

• C)Despite profit booking we have not seen any significant deterioration in the market breadth (Amongst Nifty 500 universe, 74% stocks are trading above 200 days EMA), highlighting inherent strength

• Considering ongoing elevated volatility we would revise support base at 22100-22000 range as it is confluence of Lower band of 5 months upward sloping channel coincided with 80% retracement of current up move (21821-23110) and 100 days EMA

Nifty Bank: 48682

Technical Outlook

Day that was :

The Nifty Bank index snapped two day losing streak after rating upgrade of some large banks by global rating agency . Nifty private banks index gained 0 . 3 % leading Nifty Bank index to close at 48682 , up 181 points or 0 .37 %

Technical Outlook :

• The Bank Nifty index started the session on a positive note bucking global cues and gained toward 49000 during the session . Index then oscillated in 48500 -49000 zone for reset of the session exhibiting resilience

• Price action formed a bullish marubuzu indicating supportive efforts near 20 -day ema (48400 ) . Index, over past three sessions retraced preceding three session rally by 61 . 8 % indicating shallow pace of retracement and breather after rally

• Structurally, the formation of higher peak and trough signifies robust price structure that makes us reiterate our positive bias and expect index to gradually head towards psychological mark of 50000 . Thus, dips to attract further buying demand since elevated support is placed at 48000 which is

• 80% retracement of past four session rally

• Value of rising 50-day ema

• Since late Jan’24 low of 44633 , Index is following a peculiar pattern that each 5 correction is followed by 7 % rally resulting into new highs to be made . This has resulted in a well channeled up move in Bank Nifty which is expected to head towards 50000 mark

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