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Nifty : 24297

Technical Outlook

Day that was…

Equity benchmarks snapped three days losing streak ahead of RBI Policy and settled Wednesday’s session at 24297, up 305 or 1.3%. Market breadth turned positive with A/D ratio of 4.6:1 as Midcap and Small cap gained 2.5% each. Sectorally, all major indices ended in green lead by Oil & Gas, pharma & metal

Technical Outlook:

* The index underwent a range bound activity after witnessing gap up opening and settled the session on a positive note. As a result, daily price action resulted into bull candle carrying higher low, indicating supportive efforts emerged at 20 days EMA amid oversold condition of daily stochastic oscillator

* Going ahead, a decisive close above Monday’s gap area (24686-24350) would indicate pause in downward momentum and open the door for meaningful pullback towards upper band of consolidation placed at 25000. In the process, stock specific action would prevail amid progression of earning season coupled with ongoing global volatility

* On the broader market front, Midcap and small cap indices have bounced after correcting 7% from life highs. We believe, broader market is undergoing healthy retracement after rallying 25% and 28%, respectively (from election low). Hence, focus should be on quality stocks backed by strong earnings

* Structurally, the formation of lower high-low after eight weeks rally indicates pause in upward momentum that makes us revise support base at 23600 as it is 38.2% retracement of past eight weeks up move 21281-25078

Nifty Bank : 50119

Technical Outlook

Day that was :

Nifty Bank snapped three day losing streak ahead of RBI policy outcome and amid weekly expiry session . Index gained 370 points or 0 .75 % to close at 50119

Technical Outlook :

* The Index commenced the session on positive note led by global cues and then consolidated for rest of the session in the range of 49900 -50200 for rest of the session . In the process index held its rising 100 day ema around 49600 for third session amid oversold reading of 11 on daily stochastics . Price action formed bullish hammer like candle indicating technical bounce from over sold readings

* Going forward, key resistance is placed now at 51300 levels which is Mondays bearish gap area and value of down ward slopping trendline drawn from life highs . Further, a decisive breach of short term support of 49600 would indicate extended correction in coming sessions towards 48500 which is confluence of a) 61 . 8 % retracement of post election rally and b) value of rising 200 -day ema (48200 )

* Price structure : A) We observe that index is undergoing healthy retracement from overbought readings after 15 % rally . Currently, index has retraced, post election, 21 session rally by 50 % over 22 sessions, indicating corrective nature of decline and would lead into higher bottom formation

* 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 higher bottom formation around 200 -day ema around 48500 levels

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