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NSE (Nifty): 15747

Technical Outlook

* The Nifty started expiry week with a gap down opening (15683- 15526). However, it managed to hold Friday’s panic low (15450) as on expected lines elevated buying demand emerged from 15500 as it is lower band of rising channel (as shown in chart). Consequently, the daily price action formed a sizable bull candle, indicating elevated buying demand as the Nifty recouped 260 points from day’s low (15505). In the process, the index maintained the rhythm of not correcting for more than three consecutive sessions since mid-March 2021, highlighting inherent strength

* Going ahead, we expect the positive momentum of the index to endure towards upper band of the consolidation at 15900 and gradually scale our earmarked target of 16100 in coming weeks. The recovery led by the key heavyweight financial stocks (as financials carries 38% weightage in Nifty), signifies rejuvenation up move that would provide impetus for next leg of up move. We believe, bouts of volatility ahead of monthly expiry would offers incremental buying opportunity which should be capitalised on to accumulate quality large cap and midcaps to ride next leg of up move towards our target of 16100 as it is confluence of :

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

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

* The broader market indices staged a strong bounce after three sessions decline. Over past four weeks, Nifty midcap, small cap indices have rallied ~12% pulling weekly stochastic oscillator in overbought territory, indicating extended breather from here on would make broader market healthy and pave the way for next leg of up move

* Structurally, we believe the Nifty has formed a strong higher base at 15200 which we do not expect to be breached. Hence, traders should take advantage of dips to accumulate quality stocks. The key support of 15200 is based on 61.8% retracement of past four week’s rally (14885-15901), at 15274

* In the coming session, index is likely to open on a positive note tracking firm global cues. We expect Nifty to resolve higher while sustaining above past three sessions identical high of 15765. Hence, use intraday dip towards 15735-15758 to create long for target of 15848.

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 34871

Technical Outlook

* The daily price action formed a strong bull candle as for the second consecutive session buying demand on expected lines emerged from the major support area of 34000 . The index in the process maintain the rhythm of not correcting more than three consecutive session as seen since April 2021 signalling strength

* Going ahead in the ongoing expiry week, we expect the index to consolidate with positive bias in the broad range of 35500 -34000 with stock specific action .

* The broader positive structure remain intact and we believe the current breather should be used as an incremental buying opportunity in quality banking stocks for up move towards our target of 36200 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 14 sessions to retrace just 50 % of its preceding 12 sessions up move (32115 -35714 ) . A shallow retracement highlights a robust price structure and a higher base formation

* The index in the last two sessions rebounded from the crucial support area of 34000 , which we expect to hold on a closing basis, as it is confluence of following technical observations :

* (a)The 50 % retracement of the previous up move (32115 -35714 ) placed at 33900

* (b)The recent breakout area and the April high (34287 ) .

* (c)The rising 50 days EMA placed at 34219 levels

* In the coming session, the index is likely to open on a positive note amid firm global cues . We expect the index to trade with positive bias while maintaining higher high -low . Hence, after a positive opening use dips towards 34870 -34940 for creating long position for the target of 35170 , maintain a stoploss of 34760

Nifty Bank Index – Daily Candlestick Chart

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