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Nifty : 25010

Technical Outlook

Day that was…

Equity benchmarks inched upward over fifth consecutive session tracking firm global cues post US Fed outcome. Nifty settled weekly expiry session at 25010, up 0.2%. However, market breadth turned negative with A/D ratio of 1:1.7 as broader market relatively underperformed. Sectorally, oil & gas, healthcare remained in limelight while auto, IT,PSU Banks extended breather

Technical Outlook

* The index witnessed a rangebound activity after approaching psychological mark of 25000. The daily price action resulted into doji like candle carrying higher high-low, indicating stock specific action amid positive bias

* Going ahead, we expect index to undergo healthy consolidation in the broader range of 25300-24600 wherein stock specific action would prevail amid sectoral rotation. Key point to highlight is that, past four sessions rangebound activity amid overbought conditions signifies dwindling of upward momentum after 18% rally seen over past 8 weeks (off election outcome low). Further, negative divergence on the weekly stochastic oscillator suggest temporary breather in coming sessions

* On the broader market front, Midcap and small cap indices have rallied 25% and 28% from election low. As a result, both indices are approaching price parity of Oct23-Feb24 rally, indicating possibility of temporary breather at life highs can not be ruled out. Hence, stock specific action should be in focus amid ongoing earning season

* Structurally, the formation of higher peak and trough signifies buying demand at elevated support base that makes us revise support base at 24600 as it is confluence of:

* A) 38.2% retracement of past 6 week’s up moves 23350- 25078

* B) 20 days EMA is placed at 24530

Nifty Bank : 51564

Technical Outlook

Day that was :

Nifty Bank inched up by just 10 points to close at 51564 on Thursday thereby underperforming Nifty . Breadth was negative for Bank nifty as most constituents closed in red while HDFC Bank made up for the losses

Technical Outlook

* The Index spent another choppy session within Monday’s high -low range indicating lack of directional bias . Back to back small Doji candles are symptomatic of the extended period of consolidation as index await further triggers post earnings

* Index is seen marking time in a range of 50500 -52000 over past five sessions and undergoing higher base formation . We expect consolidation to prolong for few sessions and only a decisive close from the range on either side would signal further directional bias

* Key medium term support for index is placed at 49600 which is confluence of a) 50 % retracement of post election rally and b) value of rising 100 -day ema

* 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 just 38 . 2 % over 19 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 5 . 5 % decline is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a higher bottom formation around 100 - day ema around 49600 levels

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