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NSE (Nifty): 15313

Technical Outlook

* The Nifty started Tuesday’s session with a positive gap and scaled a fresh all-time high of 15432. However, profit booking from higher levels led the index to retest previous session’s low (15243) yet the Nifty managed to end above 15300. As a result, the index formed a high wave candle, indicating elevated volatility at higher levels

* The Nifty has approached in the vicinity of our earmarked target of 15500 amid overbought conditions of weekly stochastic oscillator (placed at 93). Hence, we expect momentum to slow down after sharp post Budget rally of 13%. In the process, stock specific activity would prevail as we approach the fag end of the Q3FY21 result season. We believe any temporary breather from here on would make market healthy and pave the way towards 15500 in coming weeks as it is 161.8% external retracement of last fall (14754-13596), at 15466. Therefore, any dip from here on should not be treated as negative. Instead, it should be capitalised on as buying opportunity in quality large cap, midcaps

* Nifty midcap index maintained its record setting spree and continued to outperform the benchmark, on expected lines. In the process, it maintained its strong positive correlation with developed market peers as broader market indices of developed peers have been resilient with US index hitting fresh life-time high. We expect Nifty small cap index to witness catch up activity from here on as they are still 18% away from life-time highs

* We believe any temporary cool off from here on would find its feet around 14900 as we expect elevated buying demand to emerge at key support of 14900, as it is confluence of 50% retracement of post Budget rally (14470-15432), at 14950 coincided with last week’s low of 14977 In the coming session, Nifty future is likely to open on a negative note tracking weak global cues. However, if it holds above past two session’s identical low of 15242 (on a closing basis) that would keep positive bias intact. Hence, use intraday dips towards 15210-15235 to create long position for the target of 15325.

Bank Nifty: 37098

Technical Outlook

* The price action resulted in a small bear candle indicating marginal profit booking after 2100 points run up in just two days and after almost approaching near our short term target of 37800 .

* Going forward, we expect BankNifty to extend its ongoing rally and head towards 37800 , which is implication of last week’s range breakout (1200 points) projected from breakout level of 36600 levels

* Structurally, th e rising peak and trough formation after faster retracement of pre budget correction signifies robust price structure from medium term perspective .

* On relative terms private banking space is favourably placed and expected to outperform within BFSI space

* The key short term support for the index is placed around 35400 levels as it is the confluence of the following : a) 38 . 2 % retracement the current up move 29687 to 37449 is placed around 35618 levels b) Last week’s low placed at 35428 levels In the coming session, index is likely to open on a negative note tracking weak global cues . However, holding above last sessions low 36832 (on a closing basis) would keep positive bias intact . Hence, after a gap down opening we recommend to utilize intra day dips towards 36870 -36930 for creating fresh long positions in Bank Nifty February Futures for target of 37065 meanwhile stop loss is placed at 36830

Bank Nifty Index – Daily Candlestick Chart

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