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Nifty : 24324

Technical Outlook

Day that was…

Equity benchmarks witnessed minor profit booking after recording fresh all time high of 24461. Nifty declined 109 points or 0.45% to settle the session at 24324. Market breadth turned negative with A/D ratio of 1:1.9 as small cap index relatively underperformed the benchmark. Sectorally, auto, IT, metal underwent profit booking while pharma, FMCG relatively outperformed

Technical Outlook:

* The index witnessed profit booking after recording fresh All Time High of 24461. However, supportive efforts from 10 days EMA helped index to recover some of its initial losses. As a result, daily price action formed a bear candle with lower shadow, highlighting elevated volatility

* The buying demand from elevated support base of 10 days EMA (which has been held since election result low) highlights inherent strength that bodes well for continuation of upward momentum towards our earmarked target of 24700 by July 2024. However, traders should note that, past five week’s sharp up move of 15% has hauled weekly stochastic oscillator in overbought territory (placed at 95). Thus, possibility of temporary breather at higher levels cannot be ruled out ahead of budget coupled with onset of Q1FY25 earning season

* Further, only a decisive close below 10 days EMA would lead to temporary pause in ongoing upward momentum. However, such breather should not be construed as negative instead capitalized it as buying opportunity as key support is placed at 23700. Our positive bias is further validated by following observations:

* A) The formation of higher peak and trough supported by sturdy market breadth signifies inherent strength (currently 82% of stocks trading above 50 days EMA

* B) Global set up continues to remain strong footing and barring minor retracements does not flag bigger volatility

* Structurally, the elongation of rallies followed by shallow retracement signifies buying at elevated support base that makes us revise support base at 23700 as it is 20 days EMA coincided with 61.8% retracement of past two weeks up move 23350- 24401

Nifty Bank: 52189

Technical Outlook

Day that was :

Nifty Bank index declined on Wednesday amid further profit taking . Index closed 380 points or 0 .17 % higher at 52568

Technical Outlook :

* The index remained under pressure through the session and failed to post any meaningful recovery resulting in a bear candle which closed below 10 -day ema for first time post election outcome . Over past eight sessions, index has consolidated in a broad range of 52000 -53500 while retracing sharp rally

* Going forward, holding immediate support and last week low of 52000 would extend ongoing consolidation while a decisive breach of 52000 would be a sing of extended profit taking

* PSU banking stocks have witnessed extended profit taking/consolidation over few weeks and expected to form a higher bottom formation over next few sessions

* Meanwhile, we revise short term support to last week’s low of 52000 which also coincide with rising 10 -day ema that has been held since election outcome over past nineteen sessions

* Price structure : We observe that index is maintaining its higher high -low formation on multiple time frames and remain in steady uptrend and short term declines are attracting buying support . Hence consolidation in the short term will help index to undergo higher base formation and work out of overbought readings

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