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Nifty : 24124

Technical Outlook

Day that was

Equity benchmarks concluded volatile session on a flat note and settled the session at 24124, down 18 points. However, the market breadth remained positive. Sectorally, IT, oil & gas outshone while financials took a breather

Technical Outlook:

* The index started the session on a positive note and clocked a fresh All Time High of 24236. However, index pared initial gains and settled the session on a flat note. As a result, daily price action resulted into small bear candle carrying higher low, indicating continuation positive momentum amid stock specific action

* 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: 52168

Technical Outlook

Day that was

Nifty Bank index declined on Tuesday led by profit taking in recently run up private banks and extended correction in PSU banks ahead of quarterly business updates . Index closed at 52168 , down 0 .77 % or 406 points

Technical Outlook :

* The index began on positive note but failed to sustain above 52500 levels as profit taking across banking heavyweights barring HDFC Bank weighed on index . As a result index closed near days low and formed a sizeable bear candle with lower lows . Profit taking over past few sessions due to overbought readings is in expected lines IN the process index has approached its 10 -day average which has been held over past eighteen sessions . Holding the same (51986 ) would lead to a bounce back, however such bounce will be meaningful only if index manages to sustain above Tuesdays high of 52800 which remains key immediate hurdle in the short term

* Going forward, we expect index to continue its retracement of past few weeks rally and consolidate in the range of 51000 - 53000 . Hence strategy should be to buy dips around 51000 levels

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

* Price structure : We observe that index is maintaining its higher high -low formation on multiple time frames and remain in steady uptrend and current decline is a healthy retracement of past few weeks rally and will help to ease out overbought readings

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