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NSE (Nifty): 15175

Technical Outlook

* Equity benchmarks concluded weekly derivative expiry session on a positive note tracking firm global cues. The Nifty settled Wednesday’s session at 15175, up 76 points or 0.5%. Market breadth turned in favour of advances with A/D ratio of 1.35:1. Sectorally, all major indices ended in green led by IT, metal and pharma, meanwhile PSU Banks took a breather 

* The index started the weekly expiry session with a positive gap and undergone minor profit booking. However, supportive efforts emerged from the lower end of the gap placed at 15100 that helped index to recover early session losses and endure positive momentum. As a result, daily price action formed a small bear candle with long lower shadow, indicating elevated buying demand

* The index is opening with a strong positive gap tracking buoyant global cues leading Nifty to resolve above immediate resistance of 15270 and consequently challenge life highs of 15432. On a smaller degree chart this development will result in a faster retracement as index will retrace past five sessions consolidation (15273-14862) in just a single session, indicating robust prices structure. We expect index to head towards our earmarked target of 15500 in coming sessions. Meanwhile, lower band of recent consolidation placed at 14900 would act as immediate support

* The broader market has regained upward momentum after couple of days breather, indicating rejuvenation of up trend. We expect broader market indices to maintain the positive correlation with their global peers and accelerate the relative outperformance wherein catch up activity would be seen in small cap index as it is still 14% away from its life-time highs compared to Nifty Midcap index which is already hovering around its life highs

* Structurally, we believe, index has formed a strong higher base around 14500 mark which we do not expect to be breached, as it is confluence of a) since May 2020, the index has not sustained below its 50 days EMA. Currently, the 50 days EMA is placed at 14570, b) the 50% retracement of February rally (13597-15432), at 14514 and c) the past two week’s panic low is placed at 14468

* In the coming session, Nifty future is likely to open with a positive gap tracking firm global cues. We expect the index to maintain positive bias as over past couple of sessions intraday dips were bought into. Hence, post gap up opening use intraday dip towards 15327-15353 to create long position for target of 15442.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35938

Technical Outlook

* The Nifty Bank index traded in a range with high volatility and closed marginally higher by 0 . 2 % to gain for the third consecutive session amid firm global cues . The pullback was lead by the private banking stocks as the Nifty private bank index closed higher by 0 . 3 % . The Bank Nifty ended the session at 35938 up by 72 points or 0 . 2 % on Wednesday 

* The daily price action formed a high wave candle which maintained higher high -low signalling positive bias . Index in todays session is opening gap up amid firm global cues above Wednesday high (36176 ) signalling extension of the current up move in the coming sessions .

* Going ahead, in the short term we expect the index to maintain positive bias and retest its all time high of 37700 in the coming weeks .

* The index over the past 17 sessions has retraced just 38 . 2 % of preceding 13 sessions sharp up move (29688 -37708), at 34645 . The slower pace of retracement signifies healthy retracement and a higher base formation for the next leg of up move .

* The recent healthy retracement has helped the index to cool off the overbought conditions of weekly stochastic oscillator (currently at 60 ) . Therefore, the current breather should not be seen as negative and should be capitalised on as incremental buying opportunity, as we do not expect the index to breach the revised key support of 34500 -35000 as it is confluence of : a) The 38 . 2 % retracement of the budget rally (29687 -37708 ) placed at 34645 levels b) The recent panic low is also placed at 34658 levels

* In the coming session, the index is likely to open gap up on the back of strong global cues . We expect the index to trade with positive bias while maintaining higher high -low .

* Hence after a positive opening use intraday dips towards 36380 - 36440 for creating intraday long for the target of 36660 , maintain a stoploss at 36270 Among the oscillators, the daily stochastic is placed near the neutral reading of 50 , and is currently in a upward trend thus supports the positive bias in the index

Nifty Bank Index – Daily Candlestick Chart

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