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Technical Outlook

• The weekly price action formed a high wave candle, indicating elevated volatility as profit booking emerged after approaching the psychological mark 15000

• Going ahead, we expect index to consolidate in the broader range of 14900-14200 with stock specific action amid progression of Q4FY21 result season. The index has rallied ~900 point during current up move (14151-15044) which had hauled daily stochastic oscillator in overbought condition at 93. Hence, temporary breather from hereon would help index to cool off the overbought conditions and make market healthy. Such breather should be capitalised as incremental buying opportunity in quality stocks as we expect index to head towards 15400 in coming months

• Key point to highlight is that, the current up move (~900 points) is larger in magnitude compared to early March rally of 868 points. The elongated of up move signifies rejuvenation of upward momentum that augurs well for next leg of up move. Going forward we expect corrections to be shallower in nature leading to a higher bottom formation.

• We believe outperformance in midcap to continue. Meanwhile, BFSI, Pharma, Metal and Consumption to remain in focus.

• On the stock front, Axis Bank, Cipla, Ambuja Cement, Concor, L&T Infotech, SAIL are preferred large caps while in midcaps, Balkrishna Industries, Carborundum Universal, BEL, Mindtree, Radico Khaitan, Bata India, Tata Chemicals, Jindal Stainless expected to outperform

• The Nifty small cap index resolved out of past two months consolidation and clocked a fresh 52 weeks high, highlighting inherent strength. We expect, broader market indices to endure their relative outperformance wherein small cap would witness catch up activity as Nifty midcap index is hovering at its all-time high whereas small cap index is still 11% away from its life highs

• Structurally, we believe index has formed a higher base at key support threshold of 14200 which we do not expect to breach. Hence dips should be capitalised on as buying opportunity as level of 14200 is confluence of a) Lower band of falling channel at 14200 b) 100 days EMA at 14200 c)Last week’s panic low at 14151 In the coming session, index is likely to witness gap down opening tracking weak Asian cues. However, we expect index to hold last week’s low of 14420. Hence, use intraday dip towards 14400-14425 to create long for target of 14512

NSE Nifty Daily Candlestick Chart

Nifty Bank: 33714

Technical Outlook

• The weekly price action formed a high wave candle which closed above last two weeks high despite profit booking on Friday session signalling positive bias and conclusion of the corrective decline .

• Going ahead, after a up move of more than 3800 points, the index likely to consolidate in the 31500 -34000 range . Therefore dips should be capitalised as buying opportunity, as we expect index to head towards 34900 levels in the coming months , as it is the 61 . 8 % retracement of the entire decline (37708 -30405 ) .

• Key point to highlight is that, the recent up move (3880 points) is larger in magnitude compared to late February up move of 2256 points . The elongation of up move signifies rejuvenation of upward momentum that augurs well for next leg of up move . Therefore, the current temporary cool off should not be seen as negative instead it should be capitalised to accumulate quality banking stocks

• The index maintained the rhythm of not correcting more than 20 % as witnessed since March 2020 . In the current scenario it rebounded after correcting 19 % from the all -time high (37708 ) . Hence it provides favourable risk -reward setup for the next leg of up move • The index has immediate support at 32000 -31500 levels being the confluence of the previous week low and the 61 . 8 % retracement of the current up move (30405 -34287 ) . While the major support is placed in the range of 30500 -30000 levels

• In the coming session, the index is expected to open gap down on back of soft global cues . Volatility is expected to remain high as buying demand is likely at lower levels around support area of 32000 . Hence, after a negative opening use dips towards 31920 - 31980 for creating long position for the target of 32190 , maintain a stoploss of 31810

• The weekly stochastic is seen rebounding from the oversold territory and is placed at a reading of 40 thus validates positive bias in the index

Nifty Bank Index – Daily Candlestick Chart

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