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NSE (Nifty): 15687

Technical Outlook

* The Nifty started the session on a positive note although profit booking in IT and private banking stocks near 15900 mark weighed on benchmarks. Price action of the day thereby resulted in a bear candle indicating extended consolidation* resulted in a bear candle indicating extended consolidation • Nifty has been witnessing immediate resistance at the upper band of consolidation of 15900 over past two sessions. Therefore, we believe a decisive close above 15900 would lead to further acceleration of upward momentum, else prolonged time consolidation in the range of 15900-15400, amid stock specific action. However, our broader view of Nifty heading towards 16100 remains intact backed by strong broader structure. In the process, bouts of volatility would offer incremental buying opportunity as being observed over past 14 months structural uptrend. Hence, dips should be capitalised on to accumulate quality large cap and midcaps to ride next leg of up move as we eventually expect index to head 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 markets are expected to undergo a healthy retracement of past eight week sharp rally measuring over 20% that hauled weekly stochastic oscillator in overbought territory. A round of consolidation would pave the way for higher base formation and make larger uptrend robust

* Structurally, we believe the Nifty has formed a strong higher base at 15200 which we do not expect to be breached. 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 positive global cues. We expect, Nifty to trade with a positive bias amid elevated volatility owing to monthly expiry. Hence, use intraday dip towards 15630-15655 to create long for target of 15744.

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 34574

Technical Outlook

* The daily price action formed a small bear candle as the index consolidated in a 400 points range with high volatility ahead of the monthly expiry

* Going ahead we expect index to prolong the ongoing consolidation 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 16 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 on Monday’s session 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 flat note amid mixed global cues . Volatility is likely to be high on account of the monthly expiry . W e expect the index to consolidate above 34500 levels . Hence , use dips towards 34510 -34580 for creating long position for the target of 34810 , maintain a stoploss of 34390

Nifty Bank Index – Daily Candlestick Chart

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