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Nifty : 24433

Technical Outlook

Day that was…

Equity benchmarks inched northward and clocked a fresh All Time High. Nifty gained 112 points to settle Tuesday’s session at 24433. Market breadth remained positive with A/D ratio of 1.2:1. Sectorally, barring IT & Oil & gas all other indices ended in green led by Auto, pharma, Consumer Durables

Technical Outlook:

* The index started the session on a positive note and gradually inched northward as intraday pullbacks were short lived. As a result, daily price action formed a bull candle carrying higher high-low, indicating positive bias

* The formation of higher peak and trough signifies elevated buying demand that makes us reiterate our positive bias and expect Nifty gradually head towards our earmarked target of 24700 by July 2024.

* Key point to highlight is that, past five week’s sharp up move of 15% has hauled weekly stochastic oscillator in overbought territory (placed at 96). Thus, possibility of temporary breather at higher levels cannot be ruled out ahead of budget coupled with onset of Q1FY25 earning season. Hence, any dip from hereon should not be construed as negative instead capitalized it as buying opportunity as key support is placed at 23700. Our positive bias is further validated by following observations:

* A) The formation of higher peak and trough supported by sturdy market breadth signifies inherent strength (currently 86% of stocks trading above 50 days EMA)

* B) Global set up continues to remain strong footing and barring minor retracements does not flag bigger volatility

* Structurally, the elongation of rallies followed by shallow retracement signifies buying at elevated support base that makes us revise support base at 23700 as it is 20 days EMA coincided with 61.8% retracement of past two weeks up move 23350-24401

Nifty Bank: 52568

Technical Outlook

Day that was :

Nifty Bank index snapped two day losing streak on Tuesday led by 1 % gain in PSU banking index . Index closed 143 points or 0 .17 % higher at 52568

Technical Outlook :

* The index traded in very narrow range within previous session’s range resulting in inside candle indicating pause in profit taking and supportive efforts . Over past eight sessions, index has consolidated in a broad range of 52000 -53500 on expected lines, thereby digesting recent gains

* Going forward, we expect this consolidation to continue owning to overbought readings on weekly time frame amid progression of earnings

* PSU banking stocks have witnessed extended profit taking/consolidation over few weeks and expected to form a higher bottom formation over next few sessions

* Meanwhile, we revise short term support to current week’s low of 52000 which also coincide with rising 10 -day ema that has been held since election outcome over past nineteen sessions

* Price structure : We observe that index is maintaining its higher high -low formation on multiple time frames and remain in steady uptrend and short term declines are attracting buying support . Hence consolidation in the short term will help index to undergo higher base formation and work out of overbought readings

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