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NSE (Nifty): 14618

Technical Outlook

* Daily price action formed inside bar as the index oscillated within Tuesday’s trading range (14723-14462) with a positive bias. Lack of follow through to Tuesday’s fall signifies inherent strength leading to prolonged consolidation amid stock specific action

* Key point to highlight is that over the past four sessions the index has retraced 61.8% of preceding five session’s up move (15044- 14151). The slower pace of retracement highlights healthy consolidation (14900-14400) amid stock specific action that would help the index to form a higher base and eventually pave the way towards 15400 in coming months. In the process, we expect the relative outperformance of broader market to endure*

* The slower pace of retracement after ~900 points up move, which is larger in magnitude compared to the early March rally of 868 points, highlights a robust price structure. Therefore, any dip from here on should be capitalised on as an incremental buying opportunity as we do not expect the index to breach the key support threshold of 14200

* The broader market indices have been relatively outperforming the benchmark as Nifty midcap and small cap indices are hovering in the vicinity of their 52 weeks high compared to the Nifty, which is still 5% away from its 52-week high. Going ahead, we expect broader markets to see acceleration in their relative outperformance amid progression of Q4FY21 result season

* Structurally, we do not expect the index to breach the key support threshold of 14200 that has been held despite elevated volatility owing to concern over second Covid-19 wave. 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 14245 c) April-21 low placed at 14151 In the coming session, volatility would remain high owing to weekly expiry. We expect, Nifty to consolidate amid stock specific action. Hence, use intraday dip towards 14687-14712 to create long for target of 14798.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 32783

Technical Outlook

* The daily price action formed a bullish hammer like candle as despite profit booking in the first half of the session the index witnessed buying demand around 61 . 8 % retracement of previous two week up move (14151 -15044 ) and recouped its entire decline to close higher by 1 . 6 % . A follow through up move above Tuesday’s high (33012 ) will signal resumption of the up move

* Going ahead, after a up move of more than 3800 points in just seven sessions, the index is seen consolidating in the broad range of 31500 -34000 . Therefore we believe dips should be capitalised as buying opportunity, as we expect index to head towards 34900 levels in the coming month being 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 on a positive note on back of firm global cues . We expect the index to continue with its Wednesday pullback amid weekly expiry lead volatility . Hence after a positive opening use dips towards 32870 -32930 for creating long position for the target of 33160 , maintain a stoploss of 32760

* Among the oscillators the daily stochastic is placed near the oversold territory so a pullback is expected in the coming sessions

Nifty Bank Index – Daily Candlestick Chart

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