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Nifty : 24323

Technical Outlook

Day that was…

Equity benchmarks extended gains over fifth consecutive week tracking firm global cues. Nifty gained 1.25% to settle the week at 24324. Broader market relatively outperformed as Nifty midcap and small cap gained 2.4% and 3.4%, respectively. Sectorally, IT, PSU, Pharma remained in limelight while PSU Banks relatively underperformed

Technical Outlook:

* The index started the week on a positive note and gradually inched northward as the week progressed. As a result, Nifty endured it record setting spree over fifth consecutive week. The weekly price action resulted into bull candle carrying higher high-low, indicating continuation of uptrend. In the process, Nifty midcap and small index recorded fresh All Time Highs

* Going ahead, we expect Nifty to continue to trade with a positive bias and gradually head towards our earmarked target of 24700 by July 2024. Key point to highlight is that, past five week’s sharp up move of 15% has hauled weekly stochastic oscillator in overbought territory (placed at 95). Thus, possibility of temporary breather at higher levels cannot be ruled out ahead of budget coupled with onset of Q1FY25 earning season. Hence, any dip from hereon should not be construed as negative instead capitalized it as buying opportunity as key support is placed at 23700. Our positive bias is further validated by following observations:

* A) The formation of higher peak and trough supported by sturdy market breadth signifies inherent strength (currently 86% of stocks trading above 50 days EMA)

* B) Global set up continues to remain strong footing and barring minor retracements does not flag bigger volatility

* Sectorally, BFSI, IT, Oil & Gas, Capital Goods & Infra, Pharma, PSU, are expected to do well

* Structurally, the elongation of rallies followed by shallow retracement signifies buying at elevated support base that makes us revise support base at 23700 as it is 20 days EMA coincided with 61.8% retracement of past two weeks up move

Nifty Bank (52660)

Technical Outlook

Week that was :

Nifty Bank index extended record breaking spree for eighth week in a row albeit witnessed profit taking in large private banks. Nifty private banks index gained 0 . 7 % while PSU bank index flossed marginally negative despite Fridays recovery . Nifty Bank index closed at 52660 , up 318 points or 0 . 6 % for the week

Technical Outlook :

* The past week witnessed Bank nifty witnessing divergent moves in large private banks leading to a High wave candle indicating profit taking at higher band of rising channel and slow down in momentum .

* Going forward, we expect index to undergo some profit booking near higher band of channel, amid overbought readings of stochastic above 90 which has historically led to profit taking . Meanwhile, we expect stock specific action in NBFC, PSU banking space which have lagged their private peers post general election outcome .

* Strong support for coming week is placed at 51000 levels which is a low of preceding week and also exit poll sessions high which we expect to be held

* Price structure : Index has rallied 15 . 8 % from general election outcome sessions low (46077 ) and expected to retrace four week gains over next few sessions which will help prices to cool off from overbought readings, as we progress through earnings season . We expect prices to undergo a higher base formation over few weeks . PSU banks have undergone four months of consolidation and look attractive on risk -reward parameter

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