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Nifty : 24139

Technical Outlook

Day that was…

Equity benchmarks concluded lacklustre session on a flat note. Nifty settled Wednesday’s session at 24144, up 5 points. Market breadth remained negative with A/D ratio of 1:1.6 as broader market relatively underperformed. Sectorally, IT remained at forefront while metal, Oil & Gas extended losses

Technical Outlook:

* The index started the session on a subdued note and oscillated within 100 points range throughout the day. The daily price action resulted into small bear candle, indicating extended breather. We believe, markets would await for direction from global markets.

* The index has been trading in 24400-23800 over past seven sessions. The lack of follow through strength above last week’s high (24400) signifies prolonged consolidation amid stock specific action. Only a decisive close above 24400 would lead to extended pullback towards 24700 in coming weeks. Traders should note that, intermediate correction is a part of structural up move which offers incremental buying opportunity

* Structurally, key point to highlight is that since Oct-2023 Nifty has not corrected for more than 2 weeks wherein intermediate correction have been limited to 5%. In the current scenario as well, we expect index to maintain same rhythm and stage a pullback as Nifty has already corrected 5% over past 2 weeks

* India VIX is key monitorable from risk perspective and indicates lower risk perception in short term

* Globally, Nikkei and US indices have also bounced from oversold readings and expected to consolidate

* The formation of lower high-low on the weekly chart makes us revise support at 23800 as it is confluence of 50 days EMA coincided with last week’s low

* Last week’s low

Nifty Bank: 49727

Technical Outlook

Day that was

Nifty Bank maintained corrective bias for second session amid lack lustre trading activity . Index closed a narrow range session at 49727 , down 104 points

Technical Outlook :

* The Index started the session on a flattish note, followed by lack luster trading session as index traded in mere 300 points range Price action formed a bear candle with lower high -low indicating corrective bias on daily and weekly time frames

* Going forward, key resistance is placed now at 50800 levels which is current week high and value of 50 -day ema while a follow through selling below last week low of 49600 would indicate extended correction in coming sessions towards 48800 -48500 which is confluence of a) 61 . 8 % retracement of post election rally and b) value of rising 200 -day ema (48270 )

* Price structure : A) We observe that index is undergoing healthy retracement from overbought readings after 15 % rally . Currently, index has retraced, post election, 21 session rally by 50 % over 22 sessions, indicating corrective nature of decline and would lead into higher bottom formation

* B) Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 8 - 9 % from highs and in current context 7 % decline is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a higher bottom formation around 200 -day ema around 48500 levels

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