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Nifty :26328

Technical Outlook

Week that was…

Equity benchmark kick-started the new year on a strong footing as Nifty regained the momentum and scaled back to life highs. Nifty gained more than 1% for the week to settle at 26328. Sectorally, Auto, Metal, PSU Banks remained in limelight while FMCG, IT remained laggards.

Technical Outlook:

* The weekly price action formed a bull candle with lower shadow, indicating buying demand at elevated support base.

* Amidst global volatility supportive efforts from two months rising trend line provided path for Nifty to scale back to its AllTime Highs of 26300. The breakout from five weeks consolidation (26300-25700) confirms resumption of uptrend that makes us reiterate our positive stance and expect Nifty to extend the rally towards 26800 in the month of January.

* In the process, bouts of volatility owing to global development and onset of earning season would present incremental buying opportunity wherein strong support is placed at 25700.

Our constructive bias is further validated by following observations:

1. Bank Nifty: Four weeks decline entirely retraced back in just a single week, propelling index to clock a fresh All Time High

2. The ratio chart of MSCI India vs MSCI World has once again bounced from cyclical lows which has been held since CY21, indicating relative outperformance against global equities going ahead

3. Broadening of rally: The rally has broadened significantly over past two weeks with 50% of the stocks are trading above their 50 days SMA compared to 27% 2 weeks ago

4. Sectors in focus: Banking continues to lead supported by Auto and Metal while revived traction in beaten down sectors like Power, PSU, Realty augurs well for broadening of rally going ahead

Key Monitorable for the next week:

a) Q3-FY26 earnings b) US-India Trade Deal c) Quarterly Business updates d) Brent Crude Oil has remained soft and trading near lower band of consolidation. Breakdown below 58 would result into extended correction

Intraday Rational:

* Trend- short term range breakout(25700-26300)

* Levels: Buy near 38.2% retracement level of Friday’s up-move (26312-26480

Nifty Bank : 60151

Technical Outlook

Week that was:

Bank Nifty concluded the week on a strong positive note, settling at 60151 (+1.93%), amid positive global cues. The broader banking space remained supportive, with the Nifty PSU Bank Index and Nifty Private Bank Index advancing 1.8% and 0.2%, respectively, reflecting sustained sectoral strength.

Technical Outlook:

* The index started the week on subdued and resumed it uptrend for rest of the week. As a result, the weekly price action formed a strong bullish engulfing candle with a lower shadow, indicating buying interest emerging at lower levels and offering downside support.

* Key point to highlight is that, index has closed above 4 weeks trading range(58712-60114)indicating resumption of up-move and inherent strength in the ongoing trend

* Structurally, the retracement over the past four weeks has been shallow, with only 38% of the preceding four-week rally retraced, highlighting inherent strength and a healthy pause within the ongoing uptrend. On expected lines the index close above 60100 levels and now we expect it to head towards 61500 coming weeks.

* Within the banking space, the Nifty PSU Bank Index also witnessed breakout from 4 weeks trading range (8650- 8063)and now Going ahead we expect it to head towards 9200 levels being measuring implication of range breakout in coming weeks. This constructive setup is likely to propel the index towards a retest of its all-time high around 8,650 in the coming weeks

Intraday Rational:

* Trend- short term range breakout(58500-59500)

* Levels: Buy near 38.2% retracement level of its Friday’s up-move (59971-60400)

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