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NSE (Nifty): 15740

Technical Outlook

* The Nifty clocked a fresh all-time high of 15779 and underwent minor profit booking. However, the index recouped most of the intraday losses as buying demand emerged from Monday’s low (15678). As a result, daily price action formed a small bear candle with long lower shadow, highlighting breather amid stock specific action. In the process, Nifty midcap and small cap scaled to fresh all time high

* We reiterate our constructive stance on the market and expect the Nifty to eventually head towards target of 16100 in June 2021. We believe the move toward 16100 would not be linear in nature as bouts of volatility owing to overbought condition of daily and weekly stochastic oscillator (currently at 96 and 88, respectively) cannot be ruled out. However, temporary breather from here on should not be construed as negative. Instead, dips should be capitalised on as incremental buying opportunity as we do not expect the index to breach the key support of 15200 levels. Our earmarked target of 16100 is based on following observations: a) Price parity of post budget rally (13597-15432), projected from April low of 14151, at 16055 b) Past two months consolidation (15140- 14150) breakout target at 16120

* On expected lines, broader market indices scaled fresh all-time high wherein Nifty small cap index recorded all-time high after 2.5 years, highlighting rejuvenation of broader market participation. We expect broader markets to maintain their relative outperformance as current up move has been backed by improving market breadth as currently 90% of index components are trading above their 50 days EMA vs. May reading of 82%, highlighting inherent strength • Structurally, the formation of higher high-low backed b

* Structurally, the formation of higher high-low backed by rejuvenation of market breadth signifies inherent strength that makes us confident to retain support base at 15200 as it is confluence of: a) 61.8% retracement of past three week’s rally (14885-15779), at 15225 b) past two week’s low is placed at 15145 In the coming session, we expect Nifty futures to trade with a positive bias as formation of lower shadow over past couple of sessions highlights elevated buying demand. Hence, use intraday dip towards 15690-15715 to create long for target of 15798.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35085

Technical Outlook

* The daily price action formed a bear candle signalling profit booking after a sharp up move of more than 11 % in last three weeks .

* Key observation is that the index has maintained the rhythm of not correcting more than two -three sessions since April 2021 . We expect the index to maintain the rhythm and buying demand to emerge above the support area of 34400 -34500 in the coming sessions

* We believe the current breather after sharp 11 % up move in just three weeks should not be seen as negative instead it should be capitalised to accumulate quality banking stocks for the next up move towards 36200 in the 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 during previous week has gained for third consecutive week for the first time in the entire corrective decline of the last three months highlighting improving price structure

* 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 34400 -34000 levels as it is confluence of the (a) 38 . 2 % retracement of the current up move (32115 -35810 ) placed at 34400 (b the recent breakout area and the April high (34287 ) (c) The rising 50 days EMA placed at 33920 levels

* In the coming session, the index is likely to open on a flat note amid muted global cues . We expect the index to hold above 35000 levels in the June future and trade with positive bias . Hence, use intraday dips towards 34990 -35050 for creating long position for the target of 35280 , maintain a stoploss of 34880

Nifty Bank Index – Weekly Candlestick Chart

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