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Nifty :24668

Technical Outlook

Day that was…

Equity benchmark started the week on a subdued note tracking muted global cues. Nifty settle the Monday’s session at 24668, down 100 points. The market breadth turned positive with A/D ratio of 1.2:1 as broader market relatively outperformed. Sectorally, realty remained outlier by gaining 3% followed by gains Consumer Durables while IT, metal, Oil & Gas witnessed extended breather

Technical Outlook:

* The index witnessed range bound activity and settled the session on a subdued note. As a result, daily price action formed a small bear candle with confined within Friday’s trading range, indicating breather amid stock specific action

* The lack of follow through strength signifies prolonged consolidation in the broader range of 24850-24200. Going ahead, we maintain our positive stance and expect Nifty to resolve higher towards 25200. Hence, focus should be on accumulating quality stock on dips as support base is now revised upward at 24200. Our positive stance is validated by following observations:

*  a) Heavy weight sectors to drive next leg of up move: Nifty IT endured its record setting spree over second consecutive week while Bank Nifty bounced after retesting two-month range breakout area (52600). Cumulatively both sector carries 50% weightage in Nifty

*  b) Broader market in focus: Ratio chart of Nifty 500 / Nifty 100 recorded breakout from 6 months consolidation, suggesting broader market to outperform going ahead.

* c) Structure: Elongation of rallies followed by slower pace of retracement amid improving market breadth indicates robust price structure. Buying on dips would be the prudent strategy to adopt

* The Nifty midcap index extended gains over fourth consecutive week while Nifty small cap index recorded fresh All Time High last week. The traction in the broader market is backed by improving market breadth as currently, 59% stocks of Nifty 500 universe are trading above 50 days SMA compared to November reading of 35%

* The formation of higher pean and trough makes us confident to revise support base at 24200 levels as it is confluence of:

* a) 61.80% retracement of current rally (23263-24857) at 24250

* b) Friday’s panic low is placed at 24180

Nifty Bank : 53583

Technical Outlook

Day that was:

Bank Nifty witnessed a rangebound action during Monday’s trading session and settled the day on a flat note at 53581 . Meanwhile, Nifty PSU Bank index relatively outperformed the benchmark by closing positive by 0 .51 %

Technical Outlook:

* The Bank Nifty opened gap -down and started the day on a negative note . While the index saw some recovery during the initial hour and then it remained range -bound throughout the day, ultimately closing the day on a flattish note . Daily price action resulted into Doji like candle, indicating narrow ranged activity after Friday’s sharp up move .

* Going ahead, follow through strength above past two week’s high of 53888 would result into revived traction that would open the door for extension of ongoing up move towards lifetime highs of 54400 in coming weeks and further head towards 55000 as it is 123 . 6 % external retracement of 54467 -49787 . In the process, bouts of volatility cannot be ruled out ahead of US Fed meet outcome . Therefore, any decline from hereon should be capitalized at incremental buying opportunity as key support is placed at 52000 as it is 80 % retracement of current up move (51693 -53888 )

* Structurally, elongation of rallies followed by slower pace of retracement, exhibits robust price structure that bodes well for extension of ongoing uptrend .

* The PSU Bank index sustained its buying momentum from the previous trading session, closing the day on a positive note . The index is currently trading above the previous breakout mark of three months base around 7000 indicating the intact structural uptrend . Moving ahead, we expect the PSU Bank index to resume its outperformance and break higher, surpassing its recent swing high of 7248 , signaling further bullish momentum

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