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NSE (Nifty): 18162

Technical Outlook

* On expected lines, the Nifty resolved higher and achieved our target of 18200. The index started Wednesday’s session with a positive gap (18008-18050) above the psychological mark of 18000. As a result, daily price action formed a bull candle with small lower shadow, indicating continuance of upward momentum as intraday dips were bought into. In the process, Nifty scaled a fresh all-time highof 18198

* The index has logged a resolute breakout from past three week’s consolidation (18000-17400) indicating acceleration of upward momentum that makes us confident of revising our target to 18600 levels. We believe the multi sector participation signifies broader market strength wherein we believe the rejuvenated traction in banking and metal sector would lead the rally towards 18600 as it is confluence of:

* a) Since April 2020, the index followed a rhythm wherein magnitude of each major rally has been at least 32%, containing in-between corrective phases of 5-6%. Current rally since April 2021 lows of 14151, so far has gained 28%. Based on rhythm of past 15 months, we expect current rally to extend towards 18600

* b) The implied target of past three week’s consolidation (18000- 17400)is placed at18600

* The Nifty midcap index scaled a fresh all-time high over eight consecutive session, highlighting inherent strength. The current up move in the broader market has been backed by improvement in market breadth as currently 78% 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 ofongoing up trend

* Structurally, we believe any extended breather from here on would get anchored around 17600 as it is confluence of: a) 80% retracement of current up move (17452-18198) is placed at17600 b) last week’s low is at 17581

In the coming session, index is likely to open on a positive note amid firm global cues. We expect Nifty to maintain a higher high-low formation amid weekly expiry induced volatility. Hence, use intraday dips towards 18190-18220 for creating long positionfortargetof 18307

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 38635​​​​​​​

Technical Outlook

* The daily price action formed a high wave candle with a higher high -low signaling continuation of the positive momentum after breaking above the last three week range (38300-36500) earlier during the week indicating strength

* Going ahead, we expect the index to continue with its positive momentum and gradually head higher towards 39400 levels in the coming weeks as it is the confluence of the 123 . 6 % external retracement of the entire major decline (37708 -30406 ) and the 161 . 8 % last three weeks range (38300 -36500 ) signalling upside towards 39400 levels

* Despite elevated global volatility and surge in crude oil prices, index shown resilience by maintaining higher high low in all time frame and has scaled to a fresh all time high

* We do not expect the index to breach the crucial support area of 37000 hence any breather offers incremental buying opportunity .

* The index has support base at 37000 levels as it is the confluence of the following technical observations :

* The value of the rising demand line joining lows of July 2021 (34115) and August 2021 (34817) placed around 37000 levels

* The last week low is also placed around 36800 levels

* The rising 50 days EMA is also placed at 36880 level

* Among the oscillators the daily stochastic remain in up trend thus supports the positive bias in the index

* In the coming session, index is likely to open on a positive note amid firm global cues . W e expect the index to continue with its positive momentum while maintaining higher high - low . Hence use intraday dips towards 38590 -38660 for creating long position for the target of 38880 , maintain a stoploss of 38470

Nifty Bank Index – Daily Candlestick Chart

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