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Nifty : 24509

Technical Outlook

Day that was…

Equity benchmarks extended losses over second consecutive session tracking muted global cues. The Nifty settled the session at 24509, down 22 points. The market breadth remained positive as Nifty midcap, smallcap outperformed by gaining 1% each. Sectorally, Auto, metal, pharma outshone while oil & gas, IT, realty underperformed

Technical Outlook:

* The index started the session with a negative gap (24530-24445). However, supportive efforts from 10 days EMA helped index to recover intraday losses and settle the session on a flat note. As a result, daily price action formed a small bull candle carrying lower high-low, indicating breather after recent sharp up move

* Going ahead, we expect Nifty to consolidate in 24700-24000 wherein volatility would remain elevated amidst Union Budget coupled with monthly expiry. Thus, only a sustenance above 24700 post Union Budget outcome would open the door for next leg of up move. Failure to do so would lead to prolongation of consolidation amid progression of Q1FY25 earning season which would eventually make market healthy. Following are the key monitorable for the upcoming week:

* A) Budget outcome would dictate further course of action

* B) Many Index heavy weights are lined up with their Q1FY25 earnings which would have bearing on the market movement

* C) On the domestic broader market front, Nifty Midcap and Small cap indices have taken a breather after rallying 23% and 28% respectively off election outcome day low which hauled weekly stochastic oscillator in overbought territory, suggesting extended breather temporary breather wherein possibility of 5-7% correction in the broader market cannot be ruled out which has historically offered incremental buying opportunity in quality stocks

* Structurally, the formation of higher peak and trough signifies supportive efforts at elevated support base. As a result, strong support is placed at 24000 as it is confluence of:

* A) 61.8% retracement of past four weeks up moves 23350-24854

* B) July Month’s low is placed at 23993

Nifty Bank: 52280

Technical Outlook

Day that was :

Nifty Bank index settled unchanged on Monday ahead of Union Budget presentation and amid progression of earnings . Bank Nifty gained just 15 points to close at 52280

Technical Outlook :

* The Index opened lower but recovered its lost ground led by HDFC bank as buying demand emerged at lower levels near rising 20 –day ema which has been held so far since election outcome . It however maintained lower high -low sequence indicating extended consolidation . In coming budget session we expect volatility to remain high

* We expect index to consolidate in the broad range of 52800 and 51500 levels amid elevated volatility, while Union budget would provide further directional bias . Only a decisive break from this range would provide directional bias

* Immediate support is placed at 51500 -51000 as it is value of rising 50 -day average and high of exit poll day at 51133

* PSU banking stocks have witnessed some value buying last week after underperforming for few weeks . We believe higher bottom formation is made by PSU banking stocks ahead of earnings and eventually expected to head higher

*  We revise short term support to last week’s low of 52000 which also coincide with rising 21 -day ema

* Price structure : We observe that index is undergoing retracement from overbought readings after 15 % rally and short term retracements would make overall uptrend healthier . Hence consolidation in the short term will help index to undergo higher base formation and work out of overbought readings that will set stage for next upleg

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