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Nifty : 19436

Technical Outlook

* The index witnessed a gap down opening (19479-19446) and inched lower. However, fag end buying demand helped index to recover the lost ground and settle near days high. As a result, daily price action formed a doji like candle, indicating supportive efforts emerging in the vicinity of 80% retracement of Aug-Sept up move (19229-20222) placed at 19430

* Going ahead, a decisive close above Wednesday’s doji like candle (19458) would be required to pause the ongoing corrective phase. Failure to do so would lead prolongation of correction towards key support of 19200. In a secular bull market, secondary correction is a common phenomenon. Thus, ongoing correction should be treated as healthy retracement of three week rally (19223-20222). Thereby, any dip from hereon should be capitalized to accumulate quality stocks onset of Q2 earning season amid cool off crude oil price which would provide impetus for equities

* Historically, in a bull market 100 days EMA has offered incremental buying opportunity. In current scenario, 100 day EMA is placed around 19200 which we expect index to hold as it is confluence of swing low of August 2023 is placed at 19230

* Broader markets represented by Midcap and Small cap indices are currently undergoing healthy consolidation post >40% rally in past six months. Structurally, compared to benchmark, the Nifty midcap and small cap indices have been showing immense strength by sustaining above its 20 days EMA. We believe, ongoing time consolidation would set the stage for next leg of up move for the broader market

Nifty Bank: 43964

Technical Outlook

* The price action for the day formed bear candle with a bearish gap (44161 -44399 ) as prices traded below short term support of 44200 contrary to expectations . Continuation of lower high -low formation indicate corrective bias . Only a sustained close above previous session high would signal pause in downward momentum

* Follow through selling below 44200 would lead to extended correction towards June -August lows around 43500 levels in short term

* Structurally , Index is undergoing a healthy correction/retracement of entire April -July rally and would make market healthier .

* Our view is backed by following key observations

* On higher degree, index is consolidating in a broad range of 43600 -46300 since early August as it is digesting strong rally from March lows of 38613 to 46300

* PSU banks continue to relatively outperform and could lend some support at lower levels

* Heavy weight private banks including HDFC bank are now oversold and back to their key supports thereby projecting limited downsides

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