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Nifty : 19671

Technical Outlook

* The index started the session on a subdued note and gradually drifted downward as the session progressed. As a result, daily price action formed a sizable bear candle carrying lower high-low, indicating lack of follow through strength.

* Key point to highlight is that, on last five out of six sessions index has reacted from 19800 levels, highlighting stiff resistance at 19800 levels. The formation of lower high-low, signifies corrective bias. Thus, only a decisive close above previous sessions high 19840 would open the door for extended pullback, else prolongation of ongoing consolidation in 19800-19300 range with stock specific action amid progression of Q2 earning season.

* Historically, during secular up move 100 days EMA acts as a strong support. In current scenario we expect 100 days EMA to act as key support

* Broader markets represented by Midcap and Small cap indices undergoing healthy consolidation post >40 % and >50% rally which hauled monthly RSI in overbought territory, indicating possibility of profit booking at higher levels can not be ruled out.

* The formation of higher high and low on the weekly chart signifies conclusion of corrective bias that makes us confident to retain support base upward at 19300 as it is confluence of 100 days EMA is placed at 19313 coincided with current months low of 19333 

Nifty Bank: 43888

Technical Outlook

* The price action formed strong bear candle that settled near last weeks lows and also gave up recent pull back indicating strong resistance around 44500 levels . Only a higher high -low formation would indicate pause in downward momentum

* Going forward, 44500 levels remains key hurdle in the short term while decisive breach of past three month lows of 43500 would indicate extended decline

* Structurally, Index is in the process of undergoing a healthy retracement of April to July rally over past thirteen weeks and also discounting various negatives in the process . While short term prices may lead south structurally trend remains firm

* Our structural positive view is based on following key observations

* Index has retraced 18week rally (38613 -46369 ) by just 38 . 2 % over 13 weeks indicating inherent strength

* Large Private banks have undergone decent price/time correction and placed at oversold readings

* PSU bank index has given a breakout from decade long consolidation indicating structural turnaround backed by earnings 

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