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NSE (Nifty): 17790

Technical Outlook

* The Nifty started the session with a positive gap (17646-17180) and remained upbeat throughout the session as it sustained above the gap area. The daily price action formed an inside bar carrying small real body and shadows on either side, highlighting positive bias amid elevated volatility. The Nifty midcap index regained upward momentum and clocked a fresh all time high

* The lack of faster retracement on either side signifies extended consolidation in the broad range of 18000-17400 amid stock specific action. The round of intermediate breather is a common phenomenon in a bull market which makes market healthy and pave the way for next leg of up move. Key point to highlight since April 2021 is that, the Nifty has not corrected for more than 4-5% from recent swing highs. We expect the index to maintain the same rhythm. Hence, any dip from here on should not be construed as negative instead it should be capitalised on to accumulate quality stocks as we enter the Q2FY22 earning season

* The Nifty Midcap index recovered Wednesday's sharp decline and scaled fresh all-time high, indicating rejuvenation of upward momentum. The current up move in the broader market has been backed by improvement in market breadth as currently more than 72% of index components are trading above 50 days EMA compared to August reading of 58% and 44%, respectively, highlighting strength that augurs well for durability of ongoing up move. In the process, we expect unlock, retail, chemical, textile themes to remain in focus. Thus, dips should be capitalised on to accumulate quality stocks

* Structurally, formation of higher peak, trough on the larger degree chart exhibits strength. Going ahead, we believe any extended correction from here on would get anchored around 17200 as it is confluence of: a) Since April 2021, index has maintained the rhythm of not correcting for more than 4%. In current scenario 4% from all-time high of 17948 will complete at 17200 b) 80% retracement of September up move (17055-17948), at 17233

In the coming session, index is likely to open on a positive note tracking buoyant global cues. We expect Nifty to trade with a positive bias while sustaining above 17750. Hence, use intraday dip towards 17785-17815 for creating long position for target of 17897

NSE Nifty Daily Candlestick Chart

Nifty Bank: 37753 

Technical Outlook

* The daily price action formed a high wave candle which remained contained inside previous session price range signaling continuation of the consolidation . We believe the last two weeks breather will make the index healthy after the recent up move of more than 10 % in the preceding five weeks

* Lack of faster retracement on either side in the last two weeks signals extended consolidation in the broad range of 36500 - 38300 amid stock specific activity ahead of the Q 2 earnings

* Volatility is likely to remain high in the coming sessions on account of the volatile global cues and RBI monetary policy outcome on Friday . Buying on decline strategy has worked well in the last 16 months, thereby the current volatility would present incremental buying opportunity in quality banking stocks

* The index has support base around 36500 -36300 levels as it is the confluence of the following technical observations :

* 50 % retracement of the current up move (34817 -38112 ) placed around 36500 levels •

* The value of the rising demand line joining lows of July 2021 (34115) and August 2021 (34817) placed around 36500 levels

* Rising 50 days EMA is placed at 36630 level

* The upper band of the recent three months range breakout area is placed around 36300 levels

* In the coming session, index is likely to open on a positive note amid firm global cues . Volatility is likely to be high on account of the RBI monetary policy outcome . However, we expect index to maintain positive bias while holding 37500 levels . Hence use intraday dips towards 37690 -37750 for creating long position for the target of 37980 , maintain a stoploss of 37570

Nifty Bank Index – Daily Candlestick Chart

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