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NSE (Nifty): 15246

Technical Outlook

* Equity benchmarks extended their winning streak over third consecutive session amid buoyancy across global markets. The Nifty ended on Wednesday at 15246, up 326 points or 2.2%. The market breadth remained sturdy with A/D ratio 1.75:1. Barring auto, all other sectors remained in green led by financials, metal, IT.

* The index started Wednesday's session with a positive gap (14919- 15064) and filled the Friday’s negative gap, indicating conclusion of recent corrective phase. As a result, index formed a bull candle carrying higher high-low, indicating positive bias as index witnessed follow through strength above last week’s high (15176)

* The up move was on back of multi sector participation with banks leading the up move (carrying 34% weightage in the Index). The market breadth was strong signifies rejuvenation of upward momentum that makes us confident that index will endure its northbound journey and eventually retest 15500 in coming weeks.

* Key point to highlight during current week is that, index has retraced 80% of past nine sessions decline (15432-14468) in just 3 sessions, indicating robust price structure. We believe, revived traction in cyclicals would drive the index higher. Hence, any dip from here on should be capitalised on to accumulate quality stocks

* On expected lines, broader market continued with its relative outperformance wherein Nifty midcap index extended its record setting spree over third consecutive session. However, small caps as it is still 14% away from its life-time highs. Hence, we expect broader market to continue with its relative outperformance along with further catch up activity to be seen in small cap space

* Structurally, the closure of Friday's negative gap (15065-14919) confirms that the higher base is in place at 14500 which we do not expect index to breach in the near term as it is confluence of:

* a) Since May 2020, the index has not sustained below its 50 days EMA. Currently, the 50 days EMA is placed at 14462

* b) The 50% retracement of February rally (13597-15432), at 14514

* c) Time wise, secondary correction has not lasted for more than a week, since May 2020

* d) Last week’s panic low is placed at 14468 In the coming session, the index is opening on a negative note on back of weak global cues. However, we expect the index to sustain above Wednesday low (14995) and trade in a range of 15000-15150 amid elevated volatility owing to weekly derivative expiry session. Hence, suggest to create long position in dips towards 15000-15030 for target of 15110

NSE Nifty Daily Candlestick Chart

Bank Nifty: 36368

Technical Outlook

* The Nifty Bank witnessed strong up move ahead of the weekly expiry and closed higher by more than 2 . 5 % on Wednesday to gain for the third consecutive session on back of firm Asian cues . The up move was broad based as all the 12 index constituents closed firmly in the green . The Bank Nifty closed the session at 36368 levels up by 948 points or 2 . 7 % 

* The daily price action formed a strong bull candle with a higher high -low after last two sessions high wave candle signalling strength and conclusion of the corrective phase .

* Going ahead, a follow through strength above Wednesday high (36455 ) will open upside towards all time high of 37700 in the coming weeks . Failure to do so will lead to continuation of the consolidation in the range of 36450 -35000 .

* The index over the past 12 sessions has retraced just 38 . 2 % of preceding 13 sessions sharp up move (29688 -37708), at 34645 . The slower pace of retracement signifies healthy retracement and a higher base formation

* The recent healthy retracement has helped the index to cool off the overbought conditions of daily stochastic oscillator (at 34 ) and paved the way for the next leg of up move .

* Therefore, any decline from here on should be capitalised on as incremental buying opportunity as we do not expect the index to breach the revised key support of 34500 -35000 in coming weeks as it is confluence of the following : a) The 38 . 2 % retracement of the budget rally (29687 -37708 ) placed at 34645 levels b) The last Friday’s panic low is also placed at 34658 levels

* In the coming session, the index is likely to open on a negative note on the back of weak global cues . volatility would remain high owing to the weekly expiry . However, we expect the index to sustain above Wednesday low (35570 ) and trade in a range Hence use dips towards 35680 -35740 for creating intraday long position for the target of 35960 , maintain a stoploss at 35580 Among the oscillators the daily stochastic is rebounding from the oversold territory and has generated a buy signal by moving above its three periods average thus supports the positive bias

Bank Nifty Index – Daily Candlestick Chart

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