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NSE (Nifty): 15746

Technical Outlook

* The Nifty started Tuesday’s session on a positive note. However, profit booking in the vicinity of upper band of consolidation 15900 dragged index lower. The daily price action formed a bear candle carrying lower high-low, indicating extended breather

* Going ahead, we expect index to extend the ongoing consolidation in the broader range of 15950-15500 with stock specific action amid progression of Q1FY22 earning season. The volatility would remain elevated ahead of Federal Reserve meeting followed by monthly expiry on Thursday. However, despite elevated volatility we do not expect index to breach the key support threshold of 15600-15500. Hence, extended breather from here on should not be construed as negative. Instead, dips should be capitalised on to accumulate quality stocks amid progression of Q1FY22 earning season

* We believe a decisive close above upper band of consolidation 15950 backed by firm global cues and multi sector participation would open the door for next leg of up move towards our revised target of 16300 in coming month, as it is confluence of:

* a) implied target of recent consolidation (15900-15500) breakout is placed at 16300 

* b) 138.2% extension of mid-June rally (15450-15915), projected from July low of 15633, placed at 16284 

* The small cap index endured its record setting spree, highlighting relative outperformance. We believe, temporary breather from hereon would help broader markets to cool off the overbought condition after past four weeks sharp up move and form a higher base that would pave the way for next leg of up move

* Structurally, we expect ongoing corrective decline to get anchored around key support zone of 15600-15500, as it is confluence of:

* a) 80% retracement of June-July rally (15450-15962), at 15500

* b) 10 weeks EMA placed at 15630 In the coming session, the index is likely to open on a positive note tracking mixed Asian cues. We expect index to trade with positive bias amid elevated volatility ahead of monthly expiry. Hence use intraday dips towards 15690-15715 to create long for target of 15798.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 34797

Technical Outlook

* The daily price action formed a bear candle which remained contained inside previous session high -low range signalling consolidation with corrective bias for the second consecutive session after Friday’s up move . +

* Going ahead, we expect the index to continue with its last seven weeks consolidation in the broad range of 34000 -35800 . Lack of faster retracement in either direction signals continuation of the current consolidation .

* Key point to highlight during ongoing consolidation is that the index has managed to hold 34000 -34500 mark on multiple occasions, highlighting strong support base, which we do not foresee to breach

* The index has witnessed a shallow retracement as it has retraced just 50 % of its May rally (32115 -35810 ) over past seven weeks highlighting strength and a higher base formation 

* We advise to capitalize the current breather as an incremental buying opportunity in quality large and mid -cap banks as the overall structure remains positive

* The index has support base at 34000 levels being the confluence of the following technical observations

* (a) The lower band of the last seven weeks’ consolidation range placed around 34000 levels

* (b) The rising 100 days EMA is also placed at 34020 levels

* Among the oscillators the daily stochastic has rebounded from the oversold territory and is in up trend thus supports the positive bias in the index

* In the coming session, index is likely to open on a flat to positive note amid mixed Asian cues . We expect the index to consolidate with high volatility ahead of the monthly expiry on Thursday . Use intraday dips towards 34630 -34690 , for creating long position for target of 34930 , maintain a stoploss of 34510

Nifty Bank Index – Daily Candlestick Chart

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