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Nifty: 15692

Technical Outlook

• The index traded in just 100 points for entire session amid stock specific action amid lower participation ( cash turnover of 34k crores against 1month average >50k crores) As a result, daily price action formed a small bear candle which remained enclosed within Tuesday’s high-low range (15858-15659) indicating pause in downward momentum ahead of key FOMC event. Key point to highlight is that, the index has been witnessing positive divergence as the Nifty has made a lower low against daily RSI which has formed a higher low while daily stochastic approached oversold zone with a reading of 7, indicating potential technical pullback

• The index has approached key support of 15700 (which has been held on multiple occasions over past three months) ahead of global event of US FOMC meet. Going ahead, holding 15700 post event of FOMC meet would keep pullback option open. Else, prolongation of corrective bias towards 15400 can not be ruled out. Further, for sentiment to revive, index needs to form higher high-low on weekly timeframe along with improvement in market breadth. On the upside, 16200 would act as key hurdle as it is Monday’s gap down area (16202-15878) coincided with 50% retracement of current decline.

• Structurally, the sentiment indicators are approaching their bearish extremes. Historically, such bearish extreme conditions posses distinctive nature of a technical pullback in subsequent weeks. The key observations on sentiment indicators are as follows (detailed charts shown in next slide)

• A) Historically, reading of percentage of stock above 200 DMA below 20 signifies oversold conditions and witness decent bounce in subsequent weeks. Therefore, current reading of 17 (which is lowest since March 2020) signifies impending pullback B) Empirically, net advance - decline below -450 signifies market sentiment at its bearish extreme, offers favourable entry points from medium term perspective.

• We believe, strong support for the Nifty is poised at 15400 as it is confluence of: a) 61.8% retracement of CY-21 rally (13596-18604), at 15510 b) Since October 2021, the intermediate correction have not exceeded for more than 14%. In current scenario, 14% correction from April high of 18114 will mature around 15400

• The formation of lower peak and trough on the broader market indices signifies corrective bias. To pause the ongoing corrective bias, the broader market indices need to decisively close above previous session high. Else prolonged correction wherein broader market would relatively underperform the benchmark

• In the coming session, index is likely to open on a positive note tracking pullback in global market. Going ahead, holding 15700 and sustainability above 15850 needed for technical pullback. Hence, use intraday dip towards 15720-15752 for creating long position for the target of 15837

Nifty Bank: 33339

Technical Outlook

• The daily price action formed a high wave candle which remained within previous session high -low range highlighting choppy trade ahead of the US FOMC rate decision .

• Index is currently placed around the crucial support area of 33000 , holding above the same will lead to base formation in the range of 33000 -34500 . Failure to do so will lead to an extended decline towards March 2022 low of 32100 levels .

• Index has hurdle around 34500 levels being the confluence of the Monday’s gap down area (33774 -34345 ) and the 50 % retracement of the recent decline (36083 -33123 ) • Going ahead, index need to start forming higher high -low in the daily chart on a sustained basis for any technical pullback to materialize in the coming sessions • The index has key support around 33000 levels being the confluence of the following technical observations :

• (a) The value of the rising trendline joining the lows of April 2021 (30405 ) and March 2022 (32155 ) placed around 33000 levels

• (b) The previous major low of May is also placed around 33000 levels

• Among the oscillators the daily stochastic has approached oversold territory with a reading of 09 , indicating supportive effort is likely around the support area of 33000 .

In the coming session, index is likely to open on a positive note amid pullback in global equity market . Index is expected to trade with positive bias while holding above Wednesday low (33301).Hence after a positive opening use intraday dips towards 33410 -33490 for creating long position for the target of 33730 , maintain a stoploss at 33290

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