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Nifty: To head towards 17000-17200 in coming months…

Technical Outlook

* The formation of higher peak and trough signifies continuance of positive bias. which makes us confident that index would resolve higher and gradually head towards revised target of 17000-17200 in coming month

* The Nifty has rallied 8% over past four weeks that hauled weekly stochastic in overbought territory. Thus, any cool off from here on should be capitalised on as incremental buying opportunity to ride the next leg of up move towards 17000-17200 in coming months as it is price parity of past two rallies seen during CY21. Since January 2021, twice Nifty has seen 1800 points rally. In current scenario, Nifty would complete 1800 points at 17200 projected from June low of 15450

* Going ahead, we do not expect the index to breach key support threshold of 15900 as it is confluence of:

a) As per change of polarity concept, earlier breakout area of 15900 would now act as key support

b) 50 days EMA placed at 15900

Bank Nifty: Higher base above 20 week’s EMA augurs well for next leg of up move…

Technical Outlook​​​​​​​

* The Bank Nifty witnessed an extended consolidation in 34500-36300 range during previous month thus forming a base for the next leg of up move

* We expect the index after the recent healthy base formation to break out above the upper band of the range (36300) and head towards 37700 levels in the coming month as it is the confluence of the measuring implication of the recent range (36300-34800) and the previous all time high of February 2021

* In the smaller time frame the index in the last 14 sessions has retraced just 61.8% of its previous five sessions up move (34115-36219). A shallow retracement highlights a higher base formation and a positive price structure

* We do not foresee the index breaching strong support of 34500. Buying the declines strategy has worked well over past 15 months. Hence, the current breather would offer incremental buying opportunity in quality banking stocks

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