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Heading: Nifty eyeing 25000, global cues to steer sentiments

ICICIdirect Research 16 Aug 2024 DISCLAIMER

Global equities made a strong comeback last week as US recession fears subsided after latest economic data. US indices gained 2% while Nifty inched up by 0.5%
Way ahead: Nifty managed to surpass 24400 level with multi sector participation on Friday. Higher high-low on weekly time frame indicate that index has more legs on upside and expected to head towards 25000 in coming weeks. Last week’s low at 24100 remains crucial support with buy on dips strategy at work
Structure: Despite global volatility, Index has maintained its rhythm of not correcting more than 5% (pricewise) and two weeks (time wise) since beginning of CY24. Key take away is that post such price/time correction Nifty has tendency to surpass life highs in each of the four instances.
Market breadth: Profit taking in broader markets continued as percentage of stocks above 50day ema are now at 43% against 60% last week. This ratio usually bottoms out below 35%. In current context, mid and small caps may consolidate in coming week before next leg of rally emerge
India Vix: Volatility gauge has reverted to pre-election levels signaling that not much volatility is expected in near term by participants
Sectorally, IT and Pharma continues to outperform while Metals, Capital goods and PSU banks look oversold and may undergo base formation

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