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Nifty :18003

Technical Outlook

* The Nifty regained upward momentum after two sessions breather and settled above psychological mark of 18000. Daily price action formed a bull candle carrying higher high-low, indicating continuance of positive bias

* The formation of higher high-low, supported by across sector participation underpinned by improving market breadth signifies inherent strength that makes us confident to reiterate our positive stance and expect Nifty to head towards 18200 in coming weeks

* Since June 2020, on multiple occasions elevated buying demand emerged from 5 months’ average that paved the way to challenge life highs in subsequent months. In Current scenario as well index rebounded from 5 months’ average. Thereby offering fresh entry opportunity from medium term perspective. Hence, any cool off from hereon should be capitalized to accumulate quality stocks to ride next leg of up move towards 18200 as it is confluence of:

* a) 80% retracement of entire decline since October 2021 (18604- 16410) is placed at 18165 • b) November 2021 high is placed at 18210

* The broader market indices are sustaining above three months falling channel breakout area, indicating robust price structure. Meanwhile, improving market breadth augurs well for durability of current up move as 67% of stocks of Nifty 500 are sustaining above 50 day EMA compared to mid-December reading of 49%. We expect Small cap index to resolve higher and challenge the life highs in coming month

* Structurally, the formation of higher high-low signifies elevated buying demand, that makes us confident to retain support base in the range of 17500 as it is 61.8% retracement of current up move (17146-18017)

In the coming session, the index is likely to open on a subdued note tracking muted global cues. We expect index to consolidate amid stock specific action. Hence use intraday dip towards 17950-17982 for creating long position for target of 18063

NSE Nifty Daily Candlestick Chart

Nifty Bank: 38347

Technical Outlook

* The daily price action formed a bull candle with a higher high -low and a firm close above the psychological 38000 levels signaling continuation of the positive momentum . The index exhibited follow through strength after recording falling channel breakout, thus confirming conclusion of the corrective phase

* We expect the index to head towards 38800 levels in the short term and gradually challenge the psychological 40000 levels the coming month being the 80 % retracement of the entire decline (41829 -34018 )

* Going ahead we suggest to adopt a buy on dips strategy wherein the downside remains cushioned around strong support of 37000 levels . Hence dips should not be construed as negative instead capitalise it as incremental buying opportunity .

* The index has support around 37000 -36800 levels being the confluence of the following technical observations :

* (a) 38 . 2 % retracement of the current up move (34233 - 38400 ) 

* (b) the rising 100 days EMA currently placed at 36750 levels

* Among the oscillators the daily 14 periods RSI is in up trend and is seen sustaining above its nine periods average thus supports the positive bias in the index

* In the coming session , the index is likely to open on a soft note amid weak global cues . We expect the index to consolidate in a range with positive bias while holding above 38000 levels . Hence use intraday dips towards 38100 -38180 for creating long position for the target of 38430 , maintain a stoploss at 37990

Nifty Bank Index – weekly Candlestick Chart

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