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NSE (Nifty): 15722

Technical Outlook

* The Nifty started Wednesday’s session on a positive note. However, profit booking from higher levels dragged the index below Tuesday’s low of 15724. The daily price action formed a bear candle carrying a lower high-low, indicating extended breather amid stock specific action

* Key pint to highlight since mid-March 2021 is that, the index has maintained the rhythm of not correcting for more than three to four sessions in a row. In the current scenario, index has already corrected over past three sessions. Thereby, we expect Nifty to maintain the same rhythm by arresting ongoing decline in coming session. Meanwhile, the broader structure remains robust which makes us believe, Nifty would eventually resolve above the upper band of consolidation at 15900 and gradually head towards 16100 in coming weeks as it is confluence of:

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

* b) past 2 month’s range (15140-14150) breakout target at 16120

* The index has oscillated in 15900-15500 range throughout June, highlighting prolonged time consolidation after 12% rally. We believe, the ongoing healthy retracement would help the index to form a higher base as we do not expect index to breach the key support threshold of 15500. Therefore, extended breather from here on should be capitalised on as an incremental buying opportunity in quality large cap stock

* In tandem with benchmark, broader market indices are undergoing healthy consolidation which would pave the way for higher base formation and make larger uptrend robust

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

* a) 61.8% retracement of past four week’s rally (15145-15916), at 15440 b) past three week’s low is placed at 15450

* In the coming weekly expiry session, we expect index to trade with a positive bias amid elevated volatility. Hence, use intraday dip towards 15715-15740 to create long for target of 15829

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 34772

Technical Outlook

* The daily price action formed a bear candle with a lower high -low signalling extension of the corrective decline for the third consecutive session .

* Key observation is that the index in the entire recent up move since April 2021 has not corrected by more than three consecutive session . With three sessions of decline already behind us, we expect the index to rebound in the coming couple of sessions .

* Going ahead, we believe the current breather provides fresh entry opportunity to ride the next up move 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 already taken more than three weeks to retrace just 50 % of its preceding three weeks up move (32115 - 35810 ) . A shallow retracement signals positive price structure and a higher base formations

* The major short term support for the index is placed at 34500 - 34000 levels being the confluence of the following :

* (a) The 50 % retracement of the recent major up move (32115 - 35810 ) placed at 33900 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 34400 levels

* (d) The last two weeks lows are placed around 34000 levels

* In the coming session, the index is likely to open on a flat note amid mixed global cues . Volatility is likely to be high on account of the weekly expiry . We expect the index to consolidate with positive bias after last three sessions of corrective decline . Hence use intraday dips towards 34780 -34850 , for creating long position for the target of 35180 , maintain a stoploss of 34670

Nifty Bank Index – Daily Candlestick Chart

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