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Nifty : 25041

Technical Outlook

Day that was..

The Nifty gained for second session to reclaim 25k mark amid firm global cues and continued flows from domestic and foreign institutional investors. IT spearheaded gains (+1.7%) while Pharma, stocks also outperformed

Technical Outlook:

* The Nifty commenced the session on a positive note and after initial bleep, gained strength for rest of the session to form a bull candle despite last hour profit taking. Midcap and small caps outperformed resulting in strong breadth, led by IT, Pharma, consumption stocks.

* Price action formed a higher high-low on daily time frame indicating that dips are getting bought into amid stock specific play. Meanwhile, index retraced 14 session rally by less than 50% over six sessions indicating consolidation bias

* Going forward, host of economic data from US and key US federal reserve meet next week will set further tone for markets, while meantime index is expected to consolidate in 24500- 25300 band amid stock specific action. Buying dips strategy would be beneficial in historically volatile September month.

* Some key observations which help to shape our outlook are as follows:

* a) Historically, September has been a month with elevated volatility both domestically and globally. However, it is also worth noting that September volatility has been buying opportunity as Oct-dec is usually a good period for equities

* b) Brent prices continue to head lower after breakdown from 10 month consolidation and augurs well from CAD perspective

* c) strong domestic flows for august reiterate the strong domestic liquidity situation and incremental FII flow would be an added tailwind

* d) Below surface many sectors/stocks have witnessed cool off in prices over past month or so and forming a higher base above their long term mean PSU banks is one of the case to consider here

Nifty Bank : 51272

Technical Outlook

Day that was :

Nifty Bank gained further on Tuesday continuing its winning streak for second session led by private banks . Index closed at 51272 , up 154 points or 0 .30 %

Technical Outlook :

* The index started trading session on positive note and then consolidated for most part of the session, albeit maintaining positive bias . Price action formed a higher high -low indicating elevated buying amid intraday dips and expected to consolidate in the short term . Sustaining above 51400 -51600 zone would indicate strength and extended gains, else consolidation in 51400 -50000 band to continue . Volatility likely to remain elevated owing to weekly expiry .

* Meanwhile, short term support is now being revised to 50000 levels being a psychological mark and 80 % retracement of August – September gains

* PSU banking index has remained under pressure over past couple of sessions . On medium term charts, although index has approached oversold readings and therefore a technical bounce is likely in coming weeks

* Price structure : A) We observe that index is forming sequential lower highs indicating continuation of corrective phase since early July which is seen as retracement of post election rally B) Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 8 - 9 % from highs and in current context 7 % decline is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a strong bottom formation around 200 -day ema around 48500 levels

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