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Nifty: 15810

Technical Outlook

• The index started the session on a positive note and resolved higher. However, profit booking from the psychological mark of 16000 dragged Nifty 200 points lower. As a result, the daily price action formed a bear candle carrying a higher high-low, indicating breather after recent up move

• Going ahead, we reiterate our positive stance on the market and expect the Nifty to gradually head towards 16200. However, the move towards 16200 will not be in a linear manner as bouts of volatility owing to volatile global cues cannot be ruled out. Amidst elevated volatility, we expect buying dips strategy to continue to fare well as we believe strong support for the Nifty is placed at 15200. Thus, extended breather from hereon should be used to accumulate quality stocks to ride next leg of up move towards 16200 in coming weeks as it is confluence of:

• a) 61.8% retracement of June decline (16794-15183)

• b) upper band of negative gap recorded on June 13 (16201- 15878)

• The broader market indices mirroring the benchmark move, as both, Nifty midcap and small cap index are regaining upward momentum after witnessing slower pace of retracement. Recently both indices have retraced merely 38.2% of their prevailing up move, highlighting buying demand at elevated support base. In three instances over the past decade, intermediate correction in the Nifty Midcap, Small cap indices have been to the tune of 28% and 40%, respectively. At present, both indices have bounced after correcting 25% and 34%, respectively. Therefore, base formation from here on would set the stage for a technical pullback in coming weeks

In the coming session, index is likely to open on a flat note amid volatile global cues. We expect, index to trade with a positive bias amid commodity sell-off. Hence, use intraday dip towards 15734- 15764 for creating long position for the target of 15851

NSE Nifty Daily Candlestick Chart

Nifty Bank: 33815

Technical Outlook

• The daily price action formed a bear candle as the index opened higher and formed an intraday high of 34361 levels in the midsession . However, profit booking in the second half saw the index gave up its entire gains and closed near the low of the session highlighting selling pressure at higher levels around the resistance area of 34500 .

• Going ahead, only a follow through strength above Tuesday high (34361 ) will signal continuation of the recent pullback . Failure to do so will led to a consolidation in the broad range of 32600 -34300 levels

• The index has immediate hurdle around 34300 -34500 levels as it is the confluence of the higher band of bearish gap area of 13th June 2022 and the 61 . 8 % retracement of the decline of June 2022 (36083 -32290 ) and also the falling supply line joining the highs since April 2022 .

• Dips towards the support area of 32600 -33000 levels being the 80 % retracement of the recent up move (32291 -34361 ) should be used as an incremental buying opportunity

• The index has key immediate support around 32100 levels as it is the almost identical lows March and June 2022 placed around 32155 levels

• Amongst momentum oscillators, weekly RSI has formed a positive divergence with June low reading of 38 against May 2022 reading of 37 while price made new low . Such divergence is indicating receding downward momentum and likely to trigger further technical pullback in coming weeks

In the coming session, index is likely to open on a flat note amid weak global cues . Volatility is likely to be high on account of the volatile global cues . After a flat opening use intraday dips towards 33550 -33630 being the 61 . 8 % retracement of the previous three sessions up move (33131 -34399 ) for creating long position for the target of 33870 , maintain a stoploss at 33440

Nifty Bank Index – Weekly Candlestick Chart

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