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Nifty : 23501

Technical Outlook

Week that was…

Equity benchmarks concluded truncated week on a flat note as Nifty settled the week at 23501. Broader market relatively outperformed as Nifty small cap gained 1%. Sectorally, financials, IT, metal outperformed while auto, FMCG took a breather

Technical Outlook:

* The index started the truncated week on a soft note and witnessed lackluster move throughout the week. The weekly price action formed a high wave candle carrying higher highlow, indicating elevated volatility amid stock specific action

* The continuous sectoral rotation backed by improving market breadth signifies inherent strength that makes us reiterate our positive stance and expect Nifty to gradually head towards 23800 in coming weeks

* We believe, index is undergoing time-wise correction after 11% rally (Election Day outcome low) which would make market healthy and pave the way for next leg of up move. Thus, extended breather from hereon should be capitalized as incremental buying opportunity as strong support is placed at 23000. Our positive bias is further validated by following observations:

a. Revived traction in Bank Nifty would provide impetus for Nifty to resolve higher as Bank Nifty carries ~35% weightage in Nifty

b. Robust price structure backed by improving market breadth highlights strong market internals. Market breadth has shown renewed optimism as stocks above 50-day ema has improvised from 51% just before elections to 84%

c. Structurally, global markets are in an uptrend and unlikely to trigger elevated volatility. Hence, temporary breather should not be construed as negative

* Structurally, the formation of higher peak and trough signifies elevated buying demand that makes us retain support base at 23000 as it is 20 days EMA

Nifty Bank: 51661

Technical Outlook

Week that was

Nifty Bank index posted strongest weekly gains since December 2023 to continue its winning streak for sixth successive week . Nifty private banks gained 4 % while PSU bank index closed 1 % lower . Nifty Bank index closed at 51661 , up 1659 points or 3 .32 %

Technical Outlook :

* The index gained on three out of four sessions last week, to form a strong bull candle and recorded new highs of 51957, primarily led by large private banks . Index thus maintained its higher high -low formation with continuation of positive bias . In the process index gained 12 .76 % from Election outcome day lows in past twelve sessions leading daily stochastics at 85 levels

* Going forward, we expect index gradually to head towards 53000 mark where current rally from Election outcome low would equate with previous two major rallies since October 2023 . However, we expect journey to 53000 to be in a non - linear fashion due to overbought status of prices and volatility around monthly expiry . However, given the strength in ongoing trend, expect dips to attract buying demand with strong support at 50400 levels . Hence, retracement of rally should be considered as transitory correction and to be used as buying opportunity

* Strong support for coming week is placed at 50400 levels which is a low of last Wednesdays strong bull candle that coincides with 61 . 8 % retracement of last week’s rally

* Price structure : Index has held its rising 52 -week EMA on numerous occasions since COVID and more recently on election outcome day . We believe major bottom has been made at 46077 . We also observe that past two major rallies since October 2023 has measured 15 % before any sizeable correction takes place . We expect index to maintain rhythm and head towards 53000 levels

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