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Nifty: (17625)

Technical Outlook

* In line with our view, Nifty resolved higher and approached our target of 17600. The Nifty started Monday’s session on a positive note and marched northward throughout the session as intraday pullbacks were short lived. As a result, daily price action formed a sizable bull candle carrying higher high-low, indicating acceleration of upward momentum

* Going ahead, we believe, sustainability above 17600 over next couple of sessions would open the door for extension of ongoing up move towards 18200 in coming weeks. Our constructive stance on the market is based on following thesis:

* a) The current up move in Nifty (1230 points) is larger in magnitude compared to past two pullbacks (600 points, 850 points respectively). The elongation of rallies signifies rejuvenation of upward momentum

* b) Bank Nifty logged a resolute breakout from falling channel, indicating conclusion of corrective bias. The revived traction in Bank Nifty would drive Nifty higher as it carries 35% weightage in Nifty

* c) The across sector participation backed by improving market breadth signifies broad based participation that augurs well for durability of ongoing up trend • Our revised target of 18200 is based on following observations:

* A) 80% retracement of entire decline since October 2021 (18604- 16410) is placed at 18165

* B) November 2021 high is placed at 18210 • The Nifty midcap, small cap indices have accelerated upward momentum after resolving out of three months falling channel, indicating resumption of primary up trend which makes us confident that broader market would endure its relative outperformance in coming weeks

* Structurally, the formation of higher high-low on the weekly chart signifies positive bias as per classic Dow Theory, that makes us confident to revise support base upward at 17100 as it is :

* A) 61.8% retracement of current up move (16833-17646)

* B) 100 days EMA is placed at 17160

* In the coming session, the index is likely to open on a positive note amid mixed global cues. We expect index to trade with a positive bias while maintaining higher high-low formation. Hence use intraday dip towards 17630-17662 for creating long position for target of 17745

NSE Nifty Daily Candlestick Chart

Nifty Bank: 36421

Technical Outlook

* The daily price action formed a strong bull candle with a higher high -low and a firm close above the 36000 levels . The index in the process generated a breakout above the falling channel containing last two months price decline signaling rejuvenation of upward momentum .

* The current up move in Bank Nifty of almost 2500 points is largest in the entire decline of the last two months signaling strength and resumption of up move

* Going ahead, we expect the index to gradually extend the current pullback towards 37500 levels in the coming weeks as it is the confluence of the December high and the 50 % retracement of the entire decline (41829 -34018 ) .

* In the process, bouts of volatility cannot be ruled out . However, any dip from hereon should not be construed as negative instead capitalise it as incremental buying opportunity as we expect strong buying demand exists around 35000 levels .

* On expected lines buying demand emerged after approaching maturity of price -time correction . As a result, index maintained rhythm of not correcting for more than 20 % price wise and 9 weeks’ time wise, since May 2020 .

* Immediate support is placed around 35000 levels being the confluence of :

* (a) the rising demand line joining lows of the last two weeks

* (b) the 61.8% retracement of the current up move (34018 - 36492 ) placed at 34963 levels

* In the coming session, index is likely to open on a flat note amid muted global cues . We expect the index to continue with its current up move while maintaining higher high -low, hence use intraday dips towards 36410 -36480 for creating long position for the target of 36740 , maintain a stoploss of 36290

Nifty Bank Index – Daily Candlestick Chart

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