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Nifty : 24964

Technical Outlook

Day that was…

Index recouped intra-week losses as investors shrugged off geopolitical concerns while RBI policy and Haryana state election outcome further boosted the market sentiment. Consequently, Nifty settled the volatile week on a flat note at 24964. Broader market outperformed by gaining >1%

Technical Outlook:

* The index started the week on a negative note. However, supportive efforts from 50 days EMA amid oversold conditions resulted into pullback after last week’s sharp decline. The weekly price action formed a small bear candle with shadow on either side, indicating pause in corrective bias amid elevated volatility.

* Going ahead, we expect Nifty to consolidate in 25500-24700 wherein stock specific action would prevail as we kick start the earning season. In the upcoming week, index heavy weights would be in focus as stocks carrying >35% weightage in Nifty are coming out with Q2FY25 earnings which would dictate further trend of the market along with geopolitical development

* Structurally, on expected lines, supportive efforts emerged in Nifty from 50 days EMA after 6% correction. In CY24, on five occasions, after 5-6% correction index has a tendency to form a base in the vicinity of 50 days EMA for next couple of weeks and set the stage for next leg of up move. In the current context, we expect Nifty to maintain this rhythm and hold the key support of 24700 on a closing basis that is based on following observations:

* a)61.8% retracement of Aug-Sept rally (23894-26277), placed at 24800

* b)Last month’s low is placed at 24753

* Sectorally, BFSI, IT, consumption, pharma, metal are likely to outperform while capital goods, PSU offers favourable riskreward set up

* Crude oil price retreated after facing stiff resistance in 80-82 zone as fears of supply disruptions from the conflict between Israel and Iran appears to be easing out. We expect, crude to consolidate in 75-82 range

Nifty Bank : 51172

Technical Outlook

Day that was :

Nifty Bank settled the week on a subdued note tracking global volatility amid geopolitical concerns . The index settled the week at 51172 , down 0 . 5 % . In the process, PSU Bank index relatively underperformed by losing 1 . 7 %

Technical Outlook :

* The index started the week on a subdued note . However, supportive efforts from 100 days EMA helped index to recover some of initial losses . The weekly price action resulted into hammer like candle, indicating pause in downward momentum .

* Going ahead, we expect Bank Nifty to hold the key support of 49700 and stage a pullback towards 52400 . Structurally, the BankNifty has once again respected the long -term rising trend line held since Oct -23 that coincided with 100 days EMA

* Key point to highlight is that, since July -23 , on 4 occasions Bank Nifty has maintained the rhythm of not correcting > 9 % and subsequently undergone base formation for next 2 - 3 weeks before unfolding next leg of up move . In current scenario, with 8 % correction already in place, we expect Bank Nifty to form a base and eventually outperform the Nifty as ratio chart of Banknifty/Nifty has found support from cycle lows and now inching upward that makes us believe index would gradually head towards 52400 in coming weeks

* PSU bank index is undergoing base formation in the vicinity of 200 days EMA amid oversold condition . Apart from technical oversold conditions, potential of lower interest rates are expected to act as tailwind for banks

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