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Nifty:17355

Technical Outlook

* The Nifty commenced trade with loss led by weak global cues, only to recover entire 100 points from day’s low midway through session. Markets then turned stock specific as index remained directionless in second half. The price action formed another small bodied candle indicating extended breather as market awaits further cues on possibility of a third Covid-19 wave and progression of vaccination. The index has been trading in a narrow band for past five sessions indicating abating upward momentum after a sharp 12% rally in just five weeks, that led daily and weekly stochastics in overbought trajectory (readings beyond 90). Meanwhile Nifty small cap index extendedrelative outperformance

* We expect markets to remain stock specific, with Nifty undergoing a healthy consolidation. Hence, it would be prudent to stick to buy on decline strategy to accumulate quality stocks as over past 15 months such strategy has worked well for investors. As we do not expect Nifty to breach 16900 in consolidation phase, dips towards psychological level of 17000 would offer incremental buying opportunity in coming week • Structurally, our broader positive stance is intact with Nifty gradually heading to 17600 in September 2021 as it is the price parity of July-August rally (15515-16700), projected from midAugust low of 16376. Sectoral churn amid consolidation would make overall strength healthy, going ahead

* On expected lines, broader market indices have regained upward momentum and hit new lifetime high confirming broader structural uptrend. We expect stock specific action to continue and broader indices to relatively outperform Nifty in coming week. Structurally, the formation of higher high and low, signifies continuance of positive bias which makes us confident to revise support base upward at 16900, as it is 50% retracement of current up move (16376 -17436)

* In the coming session, the index is likely to open on a positive note amid firm global cues. We expect it to trade with positive bias while sustaining above 17300. Hence, after a positive opening use intraday dips towards 17320-17352 to create long for target of 17437.

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 36471

Technical Outlook

* The daily price action formed a high wave candle signaling continuation of the consolidation for the fifth consecutive session after the recent up move

* Going ahead, we expect the index to undergo a healthy consolidation in current week, thus forming a higher base above the upper band of the recent range breakout area (36200 ) .

* Our broader positive stance is intact with bank Nifty gradually heading towards 37700 levels in September 2021 as it is the confluence of the measuring implication of the recent range breakout (36300 -34800 ) and the pre vious all -time high of February 2021

* The index has recently witnessed a faster retracement of its preceding decline as 10 sessions decline (36317 -34817 ) was completely retraced in just five sessions . A faster retrace ment in less than half the time interval highlights positive structure

* Buying on declines strategy has worked well over past 15 months . Hence, any breather in the coming week would offer incremental buying opportunity in quality banking stocks

* The index is seen forming higher high -low in the larger degree chart, which gives up confident to revise the support base higher towards | 35300 -35500 levels as it is the confluence of the following technical observations :

* 80 % retracement of the current up move (34817 -37140 ) placed around 35300 levels

* the value of the rising trend line joining the previous lows is also placed around 35480 levels

* The weekly stochastic is seen rebounding from the neutral reading of 50 , thus supports the overall positive bias in the index .

* In the coming session, index is likely to open on a positive note amid firm global cues . We expect the index to trade with positi ve bias while holding above Monday’s low (36412 ) . Hence, after a positive opening use intraday dips towards 36510 -36570 for creating long position for target of 36790 , maintain a stoploss of 36390.

Nifty Bank Index – Weekly Candlestick Chart

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