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NSE (Nifty): 15773

Technical Outlook

* The Nifty started the session on a positive note and approached the upper band of consolidation placed at 15900. Subsequently index pared most of the intraday gains as profit booking emerged from the upper band of consolidation. As a result , daily price action formed a small bear candle carrying higher high-low, indicating breather amid stock specific action

* We believe, the ongoing consolidation (15900-15400) would make market healthy by cooling off the overbought condition and form a higher base around 15500. Eventually, we expect it to resolve out of upper band of consolidation placed at 15900 and head towards our earmarked target of 16100 in coming weeks. In the process, bouts of volatility would offers incremental buying opportunity as round of temporary breather after a sharp rally is a common phenomenon in the bull market. Hence, dips 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 small cap index relatively outperformed the benchmark as it rose 0.5% compared to Nifty, up 0.2%. Past four weeks ~12% rally hauled weekly stochastic oscillator in overbought territory, indicating extended breather from here on would 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. 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 ahead of monthly expiry. Hence, use intraday dip towards 15748-15775 to create long for target of 15863.

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 34745

Technical Outlook

* The daily price action formed a small bear candle which maintained higher high -low signalling range bound trade with high volatility ahead of the monthly expiry on Thursday .

* Going ahead in the ongoing expiry week, we expect the index to continue with its consolidation 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 15 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 positive note amid firm global cues . Volatility is likely to be high ahead of the monthly expiry on Thursday . W e expect the index to trade with positive bias . Hence, after a positive opening use dips towards 34650 -34730 for creating long position for the target of 34950 , maintain a stoploss of 34540

Nifty Bank Index – Daily Candlestick Chart

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