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Nifty :24619

Technical Outlook

Day that was…

Equity benchmark started the week on a flat note tracking mixed Asian Cues. Nifty settled Monday’s session at 24619, down 59 points or 0.25%. However, market breadth remained strong with A/D ratio of 1.2:1 as Nifty Midcap, Smallcap index relatively outperformed by gaining 0.5% and 0.2%, respectively. Sectorally, Metal, Consumer Durables outperformed while FMCG, auto took a breather

Technical Outlook:

* Index started the session on a flat note and gradually consolidated in 125 points range throughout the day. The daily price action formed a small bear candle, indicating breather after recent sharp up move.

* We believe, ongoing breather would make healthy by forming a higher base above five weeks consolidation breakout area of 24500 and pave the way to head towards 25200 in coming weeks. Hence, ongoing breather should be utilized to accumulate quality stocks on dips as immediate support is placed at 24000. Our positive stance on index is based on following observations:

* a) The higher low formation in Bank Nifty post two months consolidation breakout signifies strength that makes us believe, Bank Nifty would eventually challenge lifetime highs of 54400 in coming weeks

* b) The strong recovery in Nifty midcap and small cap index (10% and 13%, respectively) resulted into breakout from three months falling trend line. Nifty small cap index is just 1% away from All Time High

* c) Revived traction in broader is backed by improvement in market breadth that bodes well for durability of ongoing uptrend. Currently, 60% stocks of Nifty 500 universe are trading above 50 days SMA compared to last week's reading of 35%

* d) Global equity markets like DJIA, DAX have been clocking fresh All Time Highs. We expect catch up activity can be seen in domestic market tracking its positive correlation with developed markets

* e) FII’s have turned positive during the week as they remained buyer on three out of five sessions. The FII’s come back would boost the market sentiment going ahead

* Structurally, Nifty and BankNifty maintained the rhythm of arresting intermediate correction within 12% and 9%, respectively, indicating robust price structure that makes us revise support base at 24000 levels as it is confluence of:

* a) 50% retracement of current rally (23263-24857) at 24060

* b) Last week’s low is placed at 24008

Nifty Bank : 53408

Technical Outlook

Day that was :

Bank Nifty took a breather after five days of winning streak . Bank Nifty concluded the sessions at 53420 , down 0 .17 % . Meanwhile, Nifty PSU Bank index relatively underperformed the benchmark by closing negative by 0 .60 %

Technical Outlook :

* The Bank Nifty started the day on a positive note . However, up -move did not sustain for long as profit booking in second half resulting the index to close on a flattish note by the end of the session . The daily price action resembles an inside bar formation which was within the price action of the previous candle, indicating breather .

* We believe, after the recent sharp up move the ongoing breather will make market healthy and form a higher base that would set the stage to challenge the 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 would prevail tracking global development . Therefore, any decline from hereon should be capitalized at incremental buying opportunity as key support is now revised upward to 52000 as it is 80 % retracement of current up move (51693 -53888 )

* Structurally, since July -23 , on 4 occasions Bank Nifty has maintained the rhythm of not correcting > 9 % and subsequently undergone base formation for next 3 - 4 weeks before unfolding next leg of up move . In current scenario, index appears to be maintaining the same rhythm as it staged a strong rebound post ~ 8 % correction

* Mirroring the benchmark move PSU Bank index also took a breather after breaking out of three months base . The breather is expected to prove healthy and moving forwards, we expect the PSU Bank index to maintain its outperformance and break higher, surpassing the September 2024 high of 7050

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