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Key support for the Nifty is placed at 15700..

Technical Outlook

• The index witnessed a subdued opening and gradually inched southward as on 4 out of 5 sessions index witnessed a negative close. As a result, weekly price action formed a bear candle carrying lower high-low, indicating pause after past three weeks’ pullback. Key point to highlight during the week was that, the decline was observed on below average volume as NSE daily cash turnover (~ |40000 crores) remained below its one-month average of |54000 crores. In the process, India VIX has cooled off over fourth consecutive week despite decline in the benchmark.

• The formation of lower peak and trough signifies prolongation of corrective bias. However, strong support for the Nifty is placed at 15700. Key point to highlight over past three months is that, index has managed to hold the key support threshold of 15700 on multiple occasions, despite elevated global volatility. Going forward, for sentiment to revive, index needs to form higher high-low on weekly timeframe along with improvement in market breadth. In the process, volatility would remain high ahead of US FOMC meet

• Sectors like IT, Auto, Energy could provide support for the index at lower levels amid oversold conditions. Meanwhile, pullback in metal index remain short lived amid weak price structure

• In large caps, we prefer Reliance Industries, Infosys, Coal India, SBI, ITC, Maruti Suzuki while in midcaps we prefer Concor, Trent, BEL, Bayer Cropscience, CUB, Automotive Axles, Varun Beverages, Sanghvi Movers

• Structurally, over past 9 sessions index has retraced 50% of preceding three sessions up move (15904-16695), indicating slower pace of retracement. We believe, strong support for the Nifty is placed at 15700 as it is confluence of 61.80% retracement of April-October 2021 rally (14151- 18604) coincided with March 2022 low of 15671

• Broader market indices taken breather after last week’s pullback. For a meaningful pullback to materialise in the broader market, Nifty midcap and small cap indices need to resolve above the upper band of past three weeks range. Else, continuance of range bound activity wherein broader market would relatively underperform the benchmark

• In the coming session, index is likely to open with a negative gap tracking weak global cues. The formation of lower high-low indicates continuance of downward momentum. Hence, use intraday pullback towards 15960-15992 for creating short position for the target of 15871

NSE Nifty Daily Candlestick Chart

Nifty Bank: 34483

Technical Outlook

• The weekly price action formed a bear candle with a lower high -low indicating extended corrective decline for a second week in a row highlighting corrective bias

• Going ahead, the index is expected to extend the current corrective consolidation amid lack of faster retracement in either direction in the broad range of 33000 -35500 ahead of US FOMC meet . Index holding above the key support area of 33000 would keep pullback options open from daily oversold territory .

• The index has already taken nine sessions to retrace less than 61 . 8 % of its preceding eight sessions strong up move (33180 -36083 ) . A shallow retracement signals extended consolidation . However, for sentiment to revive, index needs to form higher high -low on weekly time frame

• 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 weekly stochastic remain in uptrend thus supports the overall positive bias and buying demand likely to emerge around the crucial support area of 33000 -33500 levels

In the coming session, index is likely to open gap down amid weak global cues . Index is expected to trade with corrective bias as forming lower high -low in the daily chart . Hence after a gap down opening use intraday pullback towards 33980 -34060 for creating short position for the target of 33730 , maintain a stoploss at 34180

Nifty Bank Index – Weekly Candlestick Chart

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