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Nifty : 22620

Technical Outlook

Day that was…

Equity benchmarks staged a strong recovery as invertors assessed stable government in the center. Nifty settled the Wednesday’s session at 22620, up 735 points or 3.3%. Market breadth turned positive with A/D ratio of 2.7:1 as Midcap and small cap index gained ~4%, each. Sectorally, all major indices ended in green led by financials, auto, metal

Technical Outlook

* The index started the session on a positive note and extended pullback as the day progressed. Consequently, index retraced 61.8% of recent decline. The daily price action formed an inside bar, indicating pause in downward momentum as supportive efforts emerged in the vicinity of 52 weeks EMA. Meanwhile, India Vix plunged ~30% to settle the session around 19 as anxiety around General Election outcome settles down

* Going ahead, the follow through strength along with a decisive close above previous session’s high (22670) would confirm pause in downward momentum and open the door for pullback towards 22900 in coming sessions as it is 80% retracement of recent decline (23338-21281).

* Key point to highlight is that, the Bank Nifty has staged a strong rebound as buying demand emerged from 52 weeks EMA which has been majorly held off Covid lows. We believe, the sustainability in Banking index would provide impetus for extended pullback in Nifty as Bank Nifty carries 34% weightage in Nifty

* Structurally, supportive efforts emerged from 52 weeks EMA that has been held since Jul-22. The formation of higher-low signifies supportive efforts at 52 weeks EMA. Hence, we believe strong support is poised at 21800 as it is 61.8% retracement of current up move (21281-22670)

Nifty Bank: 49054

Technical Outlook

Day that was:

Indian equities made a sharp rebound on Wednesday as prospects of stable government at center boosted sentiments . Nifty Bank index rallied 2126 points or 4 . 5 % to close at 49054

Technical Outlook

* The Bank Nifty index started session higher, only to give up all the gains and almost retested Tuesdays panic low before making a U -turn and steadily rallied for rest of the session . In the process index retraced Tuesday’s decline by 61 . 8 % as buying demand emerged near 52 -week ema (46010 ) . Sharp decline in VIX indicate turn in sentiments from bearish extreme . Private banks in the process outperformed PSU banks .

* I0 the coming session key monitorable will be a follow through strength, which will lead index towards 80 % retracement of Tuesdays decline placed at 50100 levels . Market would now focus on RBI policy cues and Union budget expectations

* In the process, past two session lows and 52 -week ema at 46000 remains key support for Bank Nifty as it is confluence of :

* rising 52 -week ema at 46010 which has been held on numerous occasions since 2022

* Since 2022 June, index has under gone maximum correction of 12 % . From current high of 51133 , such magnitude is at 45500 . so most part of correction is behind us

* As index has already undergone 10 % correction, we believe major part of price correction is behind us and index may spend few days undergoing base formation as market will now look upto further cues from Union Budget and RBI policy

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