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Nifty : 24613

Technical Outlook

Day that was…

Equity benchmarks edged higher tracking firm global cues. The Nifty gained 26 points to settle the session at 244613. Market breadth remained in favour of advances as broader market performed in tandem with the benchmark. Sectorally, FMCG, IT, realty outshone while pharma, financials took a breather

Technical Outlook:

* The Nifty started the session on a positive note and subsequently oscillated in 75 points range throughout the day. The daily price action formed a Doji like candle carrying higher high-low, indicating continuation of uptrend amid stock specific action. However, series of doji like candle signifies dwindling upward momentum

* The formation of higher high-low above 10 days EMA highlights inherent strength that makes us reiterate our positive bias and expect Nifty to gradually head towards 24800 in coming weeks. However, traders should note that past seven week’s 16% rally hauled weekly stochastic in overbought territory (placed at 96). Thus, temporary breather should not be considered as negative instead dips would offer incremental buying opportunity wherein immediate support is placed at 24100. We expect focus to be on sectoral churns and stock specific action amid progression of Q1FY25 earnings season. Our positive bias is corroborated with following observations:

* A) The faster pace of retracement helped IT index to resolve out of 10 quarters cup & handle pattern, following rate cut expectations in US. Given the significant weightage of IT and banking sector in Nifty, this could act as a cushion going forward

* B) Strong domestic fund flow, firm global setups and Budget expectations along with monsoon progression domestically would be key factors influencing market direction

* On the broader market front, Nifty midcap, small cap indices have gained 23% and 28%, respectively which hauled weekly stochastic oscillator in overbought territory (placed at 95). Thus, we recommend to be choosy in this segment as retracement of rally cannot be ruled out and could lead to minor profit booking

* Structurally, the formation of higher peak and trough supported by improving market breadth makes us revise support base upward at 24100 as it is confluence of:

* A) 38.2% retracement of past three weeks up moves 23350-24592

* B) Last week’s low of 24140 coincided with 20 days EMA

Nifty Bank: 52396

Technical Outlook

Day that was :

Nifty Bank index spent another lack lustre session on Tuesday to close the session at 52396 , down 59 points . Private and PSU banking stocks both consolidated while NBFC companies relatively outperformed

Technical Outlook :

* The index commenced session on a muted note and then traded in a very narrow range of a 52400 -52600 zone, resulting in yet another inside candle that indicates lack of follow through strength above 52500 levels and extended consolidation above rising 21 -day ema (52000 ) . Over past seven sessions, index has failed to sustain above previous session high . Hence sustainability above 52500 would indicate pause in downward bias and a bounce back towards upper end of consolidation range at 53500

* Going forward, expect index to hold immediate support and last week low of 52000 and extend ongoing consolidation in 52000 -53500 band . Only a decisive breach of 52000 would be a sign of extended profit taking

* PSU banking stocks have witnessed some value buying on Monday after underperforming for few weeks . WE believe higher bottom formation is made by PSU banking stocks ahead of earnings and eventually expected to head higher

* We revise short term support to last week’s low of 52000 which also coincide with rising 21 -day ema

* 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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