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Nifty :18055

Technical Outlook

* After initial blip, Nifty regained upward momentum and sustained above the psychological mark of 18000 during the session. As a result, daily price action formed a bull candle carrying higher high-low, indicating continuance of positive bias

* The follow through strength above the 18000 mark underpinned by multi sector participation signifies inherent strength which makes us confident that index would resolve above 18200 levels and gradually retest 18600 in the run up to budget 2022. Hence, any dip from here on should not be construed as negative instead capitalised it as fresh entry opportunity from medium term perspective. Our revised target of 18600 is based on following observations:

* a) Lifetime high is placed at 18600

* b) Since June 2020, on multiple occasions elevated buying demand emerged from 5 months’ average that paved the way to challenge life highs in subsequent months. In Current scenario as well index rebounded after finding support from 5 months’ average. Thereby offering fresh entry opportunity to ride move towards 18600.

* The broader market indices are sustaining above three months falling channel breakout area supported by improvement in market breadth, indicating robust price structure. Currently, 65% components of Nifty 500 are sustaining above 50 day EMA compared to mid-December reading of 49%, indicating inherent strength that augurs well for durability of ongoing up move. We expect Small cap index to resolve higher and challenge the life highs in coming month

* Structurally, the formation of higher high-low signifies elevated buying demand, that makes us confident to revise support base at 17700 as it is Thursday’s low of 17655 coincided with 50% retracement of current up move (17238-18081)

In the coming session, the index is likely to witness gap up opening tracking buoyant global cues. We expect index to endure its northbound journey while maintaining higher high-low formation. Hence use intraday dip towards 18110-18142 for creating long position for target of 18227

NSE Nifty Daily Candlestick Chart

Nifty Bank: 38442

Technical Outlook

* The daily price action formed a small bull candle with a higher high -low and a long lower shadow signaling support at lower levels around 38000 levels . The index is exhibiting follow through strength after recording falling channel breakout, thus confirming conclusion of the corrective phase

* We expect the index to head towards 38800 levels in the short term and gradually challenge the psychological 40000 levels the coming month being the 80 % retracement of the entire decline (41829 -34018 )

* Going ahead we suggest to adopt a buy on dips strategy wherein the downside remains cushioned around strong support of 37000 levels . Hence dips should not be construed as negative instead capitalise it as incremental buying opportunity .

* The index has support around 37000 -36800 levels being the confluence of the following technical observations : • (a) 38 . 2 % retracement of the current up move (34233 - 38400 )

* (b) the rising 100 days EMA currently placed at 36780 levels

* Among the oscillators the daily 14 periods RSI is in up trend and is seen sustaining above its nine periods average thus supports the positive bias in the index

* In the coming session , the index is likely to open on a positive note amid firm global cues . We expect the index to trade with positive bias while maintaining higher high - low . Hence after a positive opening use intraday dips towards 38660 -38730 for creating long position for the target of 38980 , maintain a stoploss at 38540

Nifty Bank Index – Daily Candlestick Chart​​​​​​​

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