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Nifty : 17167

Technical Outlook

* The Nifty started the session on a positive note and consolidated within Tuesday’s trading range (17324-16931). As a result, daily price action formed an inside bar, indicating pause in downward momentum amid stock specific action.

* After a sharp fall seen over past couple of sessions, intraday chart is suggesting contraction of volatility which is taking a shape of a triangulation pattern with higher low formed over past two sessions. The Higher base formation above key support threshold of 16800 indicates dwindling of downward momentum that will set the stage to extend the ongoing pullback towards 17600 levels. Thus, dips should be capitalised on to accumulate quality stocks as we do not expect Nifty to breach key support threshold of 16900-16700 based on following observations seen in past 20 months:

* a) Since May 2020, in all three corrections index retraced 38% of preceding rally. 38% retracement of current rally is placed at 16900

* b) since May 2020, the index has not corrected for more than 10%. In current scenario, 10% correction from lifetime high of 18600 will mature at 16740

* We believe, 17600 would continue to act as immediate resistance as it is 50 days EMA coincided with 50% retracement of current decline (18210-16782)

* The broader market indices continued to outperform the benchmark. Currently, Nifty midcap and small cap indices are sustaining 100 days EMA which has been held since June 2020, highlighting supportive efforts at key support zone. We believe, both indices will resume their bull trend post a decent higher base formation above 100 days EMA. Therefore, ongoing correction should be used as an incremental buying opportunity to ride structural uptrend

In the coming session, the index is likely to open on a subdued note tracking mixed global cues. We expect index to consolidate amid elevated volatility owing to weekly derivative expiry. Hence, use dip towards 17085-17117 for creating long position for target of 17198

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 36364

Technical Outlook

*  The daily price action formed a bull candle which remained contained inside previous sessions 1200 points price range signaling continuation of the consolidation around the 200 days EMA (placed at 35321 ) . Index need to form higher high - low on a sustained basis in the daily chart for reversal of the current corrective phase

* We expect the index to hold above the support area of 200 days EMA (placed at 35321 ) and continue with its last three sessions consolidation in the broad range of 35300 -37100 in the coming sessions • Key observation is that the index since April 2020 in major corrective phase has taken 6 - 7 weeks, with five weeks of correction already behind us we expect the index to form a base in the coming couple of weeks

* On the higher side last Friday’s gap down area of 37100 which also confluence with the 38 . 2 % retracement of the November decline (40160 -35328 ) is likely to act as immediate hurdle for the index

* Nifty Bank has immediate support at 35300 levels being the confluence of the 200 days EMA and the 80 % retracement of the August -October 2021 rally (34115 -41829 )

* Among the oscillators the daily and weekly stochastic are placed at the oversold territory with a reading of 23 and 8 respectively indicating an impending pullback

* In the coming session, index is likely to open on a soft note amid mixed global cues . Volatility likely to remain high on account of the global volatility . We expect the index to continue forming a base around the 200 days EMA . Hence after a negative opening use intraday dips towards 36060 - 36130 for creating long position for the target of 36390 , maintain a stoploss of 35950.

Nifty Bank Index – Daily Candlestick Chart

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