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NSE (Nifty): 15815

Technical Outlook

* The Nifty scaled a fresh all-time high of 15916 and underwent minor profit booking. As a result, the index formed a bear candle carrying higher high-low, indicating breather at higher levels. In the process, NSE turnover has declined to 58,000cr. below its 10 days average of ~65,000cr.

*  Key point to highlight over past two weeks is that, Nifty has been facing intermediate resistance at 15900. However, the broader price structure remains robust which makes us confident to believe, index would eventually resolve above upper band of consolidation and gradually head towards 16100 in coming weeks. We believe, index has undergone time-wise consolidation wherein it oscillated in the narrow range of 15900-15600 over past five weeks, highlighting higher base formation around 15600 zone. We do not expect the Nifty to breach its strong demand zone of 15600-15500. Hence, temporary breather from here on should be capitalised to as an incremental buying opportunity in quality large cap and mid caps. The target of 16100 is based on following observations:

*  a) price parity of post Budget rally (13597-15432), projected from April low of 14151, at 16055

* b) past two month’s range (15140-14150) breakout target at 16120

* Our constructive stance is further validated by bottom up approach based on following thesis: a) The Nifty IT index continued to show resilience b) The Bank Nifty has relatively outperformed last week after undergoing slower pace of retracement, c) Metal index has been maintaining the rhythm of respecting 10 weeks EMA since May 2020

* The broader market indices are undergoing healthy retracement that helped weekly stochastic oscillator to cool off the overbought conditions. We believe, the prolonged consolidation would pave the way for higher base formation and make larger uptrend robust

* Structurally, the higher base formation signifies elevated buying demand that makes us confident to maintain support base at 15500 zone as it is confluence of:

* a) 61.8% retracement of past four week’s rally (15145-15901), at 15435 b) past three week’s low is placed at 15450

* In the coming session, index is likely to open on a flat note tracking mixed global cues. We expect, Nifty to trade with a positive bias while maintaining higher high-low formation. Hence, use intraday dip towards 15785-15812 to create long for target of 15898

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 35359

Technical Outlook

* The daily price action formed a high wave candle which maintained higher high -low signalling consolidation after the last week strong up move .

* Going ahead, we expect the index to trade with positive bias and head towards 36200 levels in the coming weeks as it is the confluence of the 80 % retracement of the entire last three months corrective decline (37708 -30405 ) and the price parity with previous up move (30405 -34287 ) as projected from the recent trough of 32115 signalling upside towards 36200 levels

* In a smaller time frame the index has witnessed a shallow retracement as it has taken 13 sessions to retrace just 50 % of its preceding 12 sessions up move (32115 -35810 ) . Followed by a sharp pullback in the last week as it has retraced almost 80 % of its 11 sessions decline (35810 -33908 ) in just five sessions . A shallow retracement followed by a sharp pullback highlights resilience

* The formation of higher high -low in the weekly time frame gives us confident to revise the support base higher towards 34500 being the confluence of the following technical observations :

* (a) The 61 . 8 % retracement of the last five sessions up move (33908 -35491 ) placed at 34500 levels

* (b) The value of the rising demand line joining lows of April 2021 and May 2021 is placed around 34500 .

* (c) The rising 50 days EMA is also placed at 34361 levels

* In the coming session, the index is likely to open on a flat note amid mixed global cues . W e expect the index to trade with positive bias while sustaining above 35200 levels . Hence use dips towards 35230 -35290 , for creating long position for the target of 35530 , maintain a stoploss of 35120

Nifty Bank Index – Daily Candlestick Chart

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