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Nifty : 24811

Technical Outlook

Day that was…

Equity benchmarks continued to inch northward over sixth consecutive session. Nifty settled the session at 24811, up 41 points or 0.2%. Market breadth remained positive with A/D ratio of 1.7:1 as broader market relatively outperformed. Sectorally, financials, consumption outshone while Oil & Gas, IT took a breather

Technical Outlook:

* The index witnessed a range bound activity wherein Nifty oscillated by 100 points range. The daily price action formed a small bear candle carrying higher high-low, indicating continuation of positive bias amid stock specific action.

* The formation of higher high-low signifies elevated buying demand that makes us reiterate our positive bias and expect Nifty to head towards psychological mark of 25000 in coming weeks. Thus, any dip from hereon should be capitalized to accumulate quality stocks as strong support is placed at 24400. Our positive bias is further validated by following observations:

* A) Since beginning of CY24, Index has maintained the rhythm of not correcting for more than 2 weeks wherein intermediate corrections have been limited to the tune of 5%. Key takeaway is that post such price/time correction Nifty has tendency to surpass life highs in each of the four instances.

* B) Bank Nifty has formed a strong base formation above 100 days EMA. Going ahead, a sustenance above past two weeks doji like candle (50800) would lead to extended pullback towards 51800 in coming weeks

* C) The current up move is backed by improvement in market breadth as currently 60% of Nifty 500 stocks are trading above their 50 days Average compared to last week’s reading of 48%

* D) On the global equity front S&P 500 index staged a strong rebound after breaking out of four weeks falling trend line

* On the broader market front, formation of higher high-low on the weekly chart indicates pause in downward momentum. Going ahead, we expect broader market to undergo healthy consolidation wherein stock specific action would prevail. Thus, focus should be on quality stocks with strong earnings

* The formation of higher high-low on the weekly chart makes us revise support base at 24400 as it is confluence of 20 days EMA coincided with 61.8% retracement of ongoing up move (24100-

Nifty Bank : 50986

Technical Outlook

Day that was :

NiftyBank gained on Thursday as PSU banks witnessed some buying amid hopes of bond yields softening following global trend and prospects of steady inflation amid strong monsoon . Index gained 300 points or 0 .59 % to close at 50986

Technical Outlook

* The Index started session on a positive note led by firm global cues however then traded in a narrow 150 points range amid lack of directional bias . In the process, index closed at higher band of past 10 session range (49650 - 50800 ) that also coincide with 50 -day ema . Price action formed bull candle with higher high -low indicating continuation of positive bias

* Going ahead, follow through strength above past two week’s high (50800 ) would lead to extended pullback in coming week towards 51800 . Meanwhile, medium term support for index is placed at 49650 which is confluence of a) 50 % retracement of post election rally and b) value of rising 100 -day ema c) past two weeks low

* 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 30 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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