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Nifty: 17629

Technical Outlook

• The Nifty, on expected lines, underwent profit booking from Friday’s high of 17792 resulting in a bear candle with sizeable higher shadow indicating selling pressure around 17600 levels, which remains key hurdle on coming session. Going forward, we expect the index to undergo healthy consolidation in the broad range of 17200-17800 in coming week amid loss of momentum, as past seven-week rally measuring 15% has led weekly oscillators into overbought trajectory with readings exceeding 90. Meanwhile, market is expected to remain stock specific amid consolidation in broader market indices

• Since April 2021, the Nifty has maintained rhythm of not correcting more than 3-4% from highs while time wise it has not corrected for more than 4 trading sessions consecutively. We expect markets to maintain this rhythm and strong buying demand to emerge around 17200-17100 levels over next couple of sessions where Nifty will achieve equality with its current rhythm – a) 3-4% magnitude from current week high (17792) that also coincides with identical lows of past two weeks (17250) and 38% retracement of most recent four-week rally (16395-17792) placed at 17259

• Broader market indices have gained around 15% each over a month. Such sharp gains have led weekly stochastic oscillator into overbought zone with reading in excess of 90 and likely to slow down the momentum for these indices wherein stock specific action would continue

Nifty Bank: 37668

Technical Outlook

• The daily price action formed a bear candle with a lower high -low signaling profit booking after the recent sharp up move of more than 9 % in just four weeks .

• Going ahead, we expect the index to undergo a healthy consolidation in the broad range of 36500 -38000 , thus form a higher base for the next leg of up move . On structural note, our broader positive stance for Bank Nifty remains intact with target of 38600 as it is the price parity with the previous two major up move of July (34115 -36317 ) and August (34817 -37140 ) each measuring roughly 2250 points added to the previous week low of 36327 signals upside towards 38600 levels

• Volatility is likely to remain high on account of the volatile global cues . Buying on decline strategy has worked well in the last 15 months, thereby the current volatility would present incremental buying opportunity in quality banking stocks

• The index has support base around | 36500 -36200 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 upper band of the last three months range breakout area is placed around 36300 levels

• rising 20 days EMA also placed around 36580 levels

• The last two weeks lows are also placed around 36200 levels

• In the coming session, index is likely to open on a flat note amid weak global cues . As the index is forming lower high - low in daily chart, hence use intraday pullback towards 37420 -37480 for creating short position for target of 37170 , maintain a stoploss of 37610

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