IGI Logo

Nifty : 15809

Day that was… 

Equity benchmarks concluded weekly derivative expiry session on a negative note tracking weak global cues. The Nifty plunged 431 points or 2.65% to shut shop for the session at 15809. The market breadth turned negative with A/D ratio of 1:3.9. Sectorally, all major indices ended in red weighed by IT, metal, financials.

Technical Outlook

• The index started the session with a negative gap (16240-15917) and drifted downward throughout the session as intraday pullbacks were short lived. The daily price action formed a sizable bear candle carrying lower high-low, indicating continuance of corrective bias. As a result, the Nifty has failed to sustain above key resistance of 16400 despite Tuesday’s sharp pullback, indicating continuance of south bound journey

• We expect the index to consolidate in the broader range of 16400- 15600 and undergo base formation amid ongoing global volatility. Key point to highlight over past 12 sessions is that the daily NSE cash turnover on the either side of the direction is below its 3 months average turnover of | 63000 crore, indicating lack of market participation amid rise in volatility. Going ahead, the Nifty can test key support zone of 15600-15400 amid ongoing global volatility, wherein intraday pullbacks can not be ruled out tracking oversold conditions. However, for a meaningful pullback to materialize, index need to decisively close above previous sessions high on a sustained basis. Meanwhile, the upside is capped at 16400 levels as it is the 38.2% retracement of past four weeks decline (17414- 15735) coincide with past two weeks identical high

• Structurally, over past two decades, on 16 out of 20 occasions despite transitory breach (not greater than 5%) of 52-week EMA (currently 16560) index has generated decent returns in subsequent 3 month and 6 months. In current scenario 5% from 52 weeks EMA will mature at 15700. Going forward, strong support for the Nifty is placed in the range of 15600-15400 as it is confluence of:

• A) 61.8% retracement of CY21 rally

• B) equality of previous down leg of 14% projected from April high of 18115

• The broader market indices mirrored the benchmark’s corrective move. Going ahead, we expect Nifty midap index to extend their underperformance and gradually form a base in the vicinity of 52 weeks EMA.

In the coming session, index is likely to witness gap up opening tracking firm global cues. We expect index to hold Thursday’s low and trade with a positive bias amid elevated volatility. Hence, use intraday dip towards 15904-15936 for creating short position for the target of 16022

Nifty Bank: 33316

Day that was 

The Bank Nifty witnessed sharp decline amid weak global cues and closed lower by 2 . 5 % on Thursday . The decline was broad based as all the 12 index constituents closed in the red . The Bank Nifty closed the session at 33316 levels, down by 848 points or 2 . 5 % on Thursday

Technical Outlook

• The daily price action formed a bear candle with a lower high -low and a bearish gap above its head (34135 -33634 ) as the index reacted lower from near the previous week high (34793 ) signaling corrective bias

• Going ahead, index need to start forming higher high -low on a sustained basis for a sizable pullback to materialize . Index has crucial support around 33000 levels being the last week low holding above which will keep the pullback option open . Failure to do so will led to an extended decline towards the March low (32155 ) .

• On the higher side index has stiff resistance around 35000 levels being the confluence of the bearish gap area of 6th May 2022 and the 38 . 2 % retracement of current decline (38765 -33927 ) .

• The index has key support around 31500 -32000 levels as it is confluence of :

• (a) March low placed at 32155

• (b) Equality with previous major decline of last 2 years signals support at 31500 levels • Among the oscillators the weekly stochastic continues to remain in down trend, however it has approached extreme oversold territory with a reading of 07 .

In the coming session, index is likely to open on a positive note amid firm Asian cues . We expect it to trade in a range with positive bias as it is seen sustaining above last week low (33000 ) . Hence after a positive opening use intraday dips towards 33410 -33480 for creating long position for the target of 33730 , maintain a stoploss at 33280

To Read Complete Report & Disclaimer Click Here

https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

Above views are of the author and not of the website kindly read disclaimer