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Nifty :23616

Technical Outlook

Day that was…

Equity benchmark started the week on negative note amid depreciating rupee as it made an all-time low of 85.84 and consistent FII’s sell-off. Nifty plunged 388 points to settle the session at 23616. Broader market remained negative with A/D ratio of 1:6 signaling broader market underperformance. Sectorally, all indices ended in red weighed by PSU Bank, Realty, Metal

Technical Outlook:

• The index started the week on a flat note. However, lack of follow through strength resulted into profit booking. The selling pressure accelerated on the breach of last sessions low of 23976. As a result, daily price action formed a sizable bear candle carrying a lower-high low formation, indicating extended correction that hauled index again in the vicinity of 200 days EMA. In the process, the India VIX (that gauge the market volatility) jumped 15% to settle the session at 15.65.

• The recent pullback was short lived as Nifty faced stiff resistance from 24200 mark. Going ahead, we expect prolongation of consolidation in the broader range of 24200- 23300 range wherein stock specific action would prevail. Only a decisive close on either side of range would dictate further course of action.

• Meanwhile, we expect volatility to remain elevated onset of Q3FY25 earning season, new policy measures from Trump government and Union Budget expectation wherein strong support is placed at 23300 it is confluence of 61.80% retracement of Jun-Sept rally (21281-26277) coincided with 52 weeks EMA placed at 23385. In the process, 24200 would continue to act as immediate hurdle.

• On the market breadth front, the net of Advance/Decline ratio has approached near its bearish extreme zone as currently 452 stocks of Nifty 500 universe closed with a negative close. Historically, such a low reading result into pullback in subsequent sessions. However, for a pullback to materializ

Nifty Bank : 49922

Technical Outlook

Day that was :

Bank Nifty continued the bearish momentum from previous session and settled the day on a negative note at 49922 , down by 2 .09 % . Meanwhile, Nifty PSU Bank index relatively underperformed the benchmark by closing negative by 4 .00 % .

Technical Outlook :

• The Bank Nifty opened the week on a flat note and witnessed steep selling throughout the day thereby creating a sizable bear candle, indicating extended correction . The index was unable to capitalize intraday pull -backs and drifted south breaching the support of 50500 on a closing basis .

• The key point to highlight is that, the Bank Nifty faced resistance at the upper end of the broader consolidation range(51600 -49700 ) and failed to surpass the mark thereby attracting selling pressure .

• Going ahead, we expect the index to continue the consolidation within the broader range of 51600 -49700 , with elevated volatility ahead of earning season . Hence, either side breakout would dictate the further course of action . Further, for any pull back to materialize, the index needs to start trading in a higher high -low formation where the immediate hurdle is placed at the upper end of the range(51600 ) .

• In tandem to the benchmark index, the PSU Bank index decisively closed below the rising channel in which it was trading since Sep -24 , indicating extended correction . Going ahead, the next level of defense is placed at 6000 mark which is 50 % retracement of previous up - move(3962 -8053 ) .

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