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NSE (Nifty): 18068

Technical Outlook

* The Nifty entirely pared initial gains after a gap up opening (17950- 18040). However, supportive efforts from 17850 mark helped index to recover early session losses and settle the session above psychological mark of 18000. As a result, daily price action formed a bull candle with long lower shadow, highlighting continuance of upward momentum. In the process, broader market relatively outperformed

* Going ahead, we expect index to extend the pullback toward upper band of consolidation placed at 18200 in coming sessions. A decisive close above 18200 would open the door for next leg of up move else prolonged consolidation (17700-18200) amid stock specific action that would make market healthy after 20% rally seen over past over past three months (15513-18604). Amidst secular bull trend, secondary correction is a norm which generally paves the way for next leg of up move. Hence, ongoing corrective phase should not be construed as negative, instead dips should be capitalised on to accumulate quality stocks

* On expected lines, the broader market continued to outperform the benchmark after approaching maturity of piece ime correction which helped both indices to form a higher base in the vicinity of 50 days EMA that has been held since June 2020. We believe, ongoing base formation would make broader market healthy. Hence, focus should be on accumulating quality midcaps to ride next rally

* Structurally, the formation of higher trough above 50 days EMA which has been held since May 2021 makes us believe that ongoing breather would find its feet around key support threshold of 17500-17600 as it is confluence of: a) 50 days EMA is placed at 17617 b) October 2021 low is placed at 17452

In the coming session, the index is likely to open on a flat note amid muted global cues. We expect, index to trade with a positive bias while maintaining higher high-low formation. Hence, use dip towards 18075- 18105 for creating long position for target of 18189

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 39438

Technical Outlook

* The daily price action formed a hammer line candle with a small real body and a long lower shadow signaling supportive effort at lower levels around 39000 levels

* Going ahead, we expect the PSU banking stocks to continue with its outperformance while the Bank Nifty to continue with its healthy consolidation in the broad range of 38400 - 40500 in the coming week

* We believe the current breather should not be seen as negative as the overall structure remain firmly positive, hence the current consolidation should be capitalized to accumulate quality banking stocks for the next leg of up move

* The short term support base for the index is placed at 38400 levels being the confluence of :

* 61 . 8 % retracement of the recent up move (36876 -41829 ) placed at 38620 levels

* the upper band of the recent seven months range breakout area

* the rising 10 weeks EMA is also placed at 38530 levels

* The weekly stochastic has cooled off from the overbought territory and is approaching its previous major low of August 2021 thus signaling a range bound consolidation in the index in the coming week

* In the coming session, index is likely to open on a flat note amid muted global cues . We expect, the index to trade in a range with positive bias . Hence, use intraday dips towards 39410 -39470 for creating long position for the target of 39730 , maintain a stoploss of 39280

Nifty Bank Index – Weekly Candlestick Chart

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