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NSE (Nifty):15690

Technical Outlook

* In line with our view, Nifty resolved higher and approached our earmarked target of 15700. The Equity benchmarks started weekly expiry session with a positive gap (15576-15655) and underwent minor profit booking. However, fag end buying demand helped index to scale to fresh all time high of 15705. The daily price action formed a significant bull candle carrying higher high-low, indicating acceleration of upward momentum

* Going ahead, a decisive close above 15700 mark would lead to extension of ongoing up move, else continuance of stock specific action amid positive bias as we expect broader market to endure their relative outperformance. The elongated up trend followed by shallow price correction backed by improving market breadth highlights robust price structure auguring well for next leg of up move. Therefore, after 1100 points rally (seen over past 14 sessions) round of temporary breather should not be construed as negative, instead it should be capitalised as incremental buying opportunity in quality stocks

* Key point to highlight is that, the broader market indices scaled to fresh 52 weeks high, thereby enduring their relative outperformance. The outperformance of Nifty midcap and small cap indices has been backed by improving market breadth as currently 86% components of both indices are trading above their 50 days EMA, highlighting broad based participation that bodes well for durability of ongoing up move

* Structurally, the formation of higher high-low signifies elevated buying demand that makes us confident to revise support base at 15200 as it is confluence of: a) 61.8% retracement of past three week’s rally (14885-15705), at 14912 b) Last week’s low placed at 15145

* In the coming session, index is likely to witness flat opening tracking muted global cues. We expect index to trade with positive bias while maintaining higher high-low formation. Hence, use intraday dip towards 15590-15615 to create long for target of 15705

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35649

Technical Outlook

* The daily price action formed a bull candle with a higher high - low signalling continuation of the up move . The index in the process recouped its entire last two sessions decline and formed a fresh high on weekly basis highlighting strength

* Going forward, we reiterate our positive stance as we expect the index to maintain positive bias and head towards our target of 36200 in coming weeks as it is the confluence of the 80 % retracement of the entire last three months corrective decline (37708-30405) and the price parity with previous up move (30405-34287) as projected from the recent trough of 32115 signalling upside towards 36200 levels .

* The index has witnessed a sharp rally of more than 11 % in just 14 sessions . Hence, a temporary breather at higher levels cannot be ruled out . However, we believe such a breather should not be seen as negative instead it should be capitalised to accumulate quality banking stocks for up move towards 36200 in the coming weeks

* The formation of higher high -low on the weekly chart signifies elevated buying demand that makes us confident to revise the support base higher towards 34000 levels as it is confluence of the following technical observations :

* a) 38 . 2 % retracement of the current up move (32115 -35713 )

* b) the recent breakout area and the April high (34287 )

* c) the rising 50 days EMA also placed around 33750 levels

* In the coming session, the index is likely to open on a soft note amid muted global cues . We expect the index to trade with positive bias while maintaining higher high -low . Hence, use intraday dips towards 35450 -35510 for creating long position for the target of 35760 , maintain a stoploss of 35340

* Among the oscillators the daily stochastic remain in up trend and is seen forming a base near its three periods average , indicating overall positive bias in the index in the short term

Nifty Bank Index – Daily Candlestick Chart

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