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Nifty: 18053

Technical Outlook

• In line with our view, traction in financials helped index to resolve higher and achieve our earmarked target of 18100. The index started the week with a positive gap (17422-17809) and sustain above the same as intraday dips were bought into. The daily price action formed a bull candle carrying higher high-low, indicating acceleration of upward momentum

• The formation of higher peak and trough supported by across sector participation signifies improving price structure that makes us believe Nifty would endure its northbound journey and gradually head towards January 2022 high of 18350 in coming weeks. Key point to highlight is that, over past 19 sessions index has retraced more than 80% of 33 sessions decline. Therefore, faster pace of retracement will be the key monitorable in the coming week that would confirm structural improvement after six months corrective phase. Thus, any dip from hereon should be capitalised as incremental buying opportunity

• The Bank Nifty witnessed follow through strength after resolving out of an inverted head and shoulder pattern, indicating continuation of positive momentum. We expect, financials to extend ongoing up move leading Nifty to rally as financials carries 35% weightage in Nifty

• The current up move is backed by significant improvement in market breadth as the breadth indicator (percentage of stocks above 50-DMA) has jumped to 67% compared to mid February (Russian invasions on Ukraine) swing high reading of 25%, indicating extension of up move going ahead.

• Structurally, follow through strength to flag breakout signifies improvement in price structure that makes us confident to revise support base at 17400 mark as it is 61.8% retracement of current up move (17004-18114), placed at 17428

• In tandem with benchmark broader market indices extended gains after resolving out of higher base above 52 weeks EMA. We expect, Nifty midcap and small cap indices to continue catch up activity with its large cap peers in coming weeks. In the coming session, index is likely to witness gap up opening tracking firm global cues. We expect index to trade with a positive bias while maintaining higher high-low formation. Hence, use intraday dips towards 18112-18142 for creating long position for target of 18227

NSE Nifty Daily Candlestick Chart

Nifty Bank: 38635

Technical Outlook

• The daily price action formed a strong bull candle with a higher high -low and a bullish gap below its base (37148 - 37665 ) signaling continuation of the up move . The index in the process on expected lines achieved our immediate target 38400 being the measuring implication of the bullish inverse head and shoulder breakout as highlighted in earlier edition .

• The index on Monday’s session has registered a resolute breakout above the falling supply line joining highs of October 2021 (41829 ) and February 2022 (39424 ) signaling extension of the current up move

• Going ahead we expect the index to maintain positive bias and head towards its CY22 high of 39400 levels in the coming sessions .

• Buy on dips strategy has worked well during the recent up move, which is likely to continue, hence dips should be used as buying opportunity as we do not expect Nifty to breach support area of 37100 being the confluence of the (a) Monday’s gap up area and the recent breakout area above last two weeks high

• Among the oscillators the daily 14 periods RSI is in strong up move and is seen sustaining above its nine periods average thus validates positive bias

In the coming session, 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 38640 - 38720 for creating long position for target of 38960 , maintain a stop loss at 38530

Nifty Bank Index – Daily Candlestick Chart

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