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NSE (Nifty): 17076

Technical Outlook

* On expected lines, the Nifty achieved our earmarked target of 17200 (as discussed in the monthly report) and underwent profit booking. As a result, the daily price action formed a bear candle carrying higher high-low, indicating breather after past seven sessions rally in a row. In the process, Nifty Midcap index endured its record setting spree, highlighting relative outperformance

* We believe a decisive close above 17200 would open the door for next leg of up move towards revised target of 17600 in coming weeks. Else there would be consolidation in 17200-16900 range amid stock specific action that would make market healthy after past five week’s 11% rally that hauled daily and weekly stochastic oscillatorin overbought territory, indicating round of temporary breather from here on can not be ruled out. Thus, any dip should be capitalised to accumulate quality stocks as over past 15 months buying on declines strategy has worked well.

* Broader market outperformed the benchmark as Nifty midcap scaled to afresh all-time high. However, Nifty small cap index is still 3% away from its all-time high. We believe, the small cap index has formed a higher base above 50 days EMA and expect it witness catch up activity in coming weeks

* Structurally, the formation of higher peak and trough on the larger degree chart makes us confident to revise support base upward at 16600, as it is 61.8% retracement of current up move of 16376-17153

In the coming session, We expect the index to trade with positive bias amid elevated volatility owing to weekly derivative expiry. Hence after a flat to positive opening use intraday dips towards 17055-17085 to create long for target of 17175.

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 36574

Technical Outlook

* The daily price action formed a doji candle with a long upper shadow signaling profit booking at higher levels around 37000 levels after the last five sessions up move . The index however maintained higher high -low signaling continuationof up trend

* Going ahead, we expect the index to maintain positive bias and gradually head towards 37700 levels in the coming weeks as it is the confluence of the measuring implication of the recent range breakout (36300-34800) and the previous all-time high of Feb’ 2021

* The index has recently generated a breakout above the past 4 month consolidation range (36300 -34800 ) . In the process the index witnessed a faster retracement of its preceding decline as 10 sessions decline (36317 -34817 ) was completely retraced in just five sessions . A faster retracement in less than half the time interval signals strength and positive structure

* The daily stochastic has approached overbought territory with a reading of 87 after the recent 2000 points up move, hence some consolidation in the coming couple of sessions can not be ruled out. Which should not be considered as negative instead should be used to accumulate quality banking stocks for next leg of up move towards 37700 levels

* The index is seen forming higher high -low in the larger degree chart, which gives up confident to revise the support base higher towards | 35000 -35300 levels as it is the confluence of the following technical observations :

* (a) 80 % retracement of the current up move (34817 -36997 ) is placed at 35253 levels 

* (b) the rising 50 days EMA is also placed at 35356 levels

* (c ) the value of the rising trend line joining the immediate previous lows is also placed around 35100 levels

* In the coming session, index is likely to open on a flat to positive note amid muted global cues . We expect the index to trade with positive bias amid elevated volatility owing to weekly derivative expiry . Hence use intraday dips towards 36530 -36590 for creating long position for target of 36830 , maintain a stoploss of 36410

Nifty Bank Index – Daily Candlestick Chart

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