IGI Logo

NSE (Nifty): 16635

Technical Outlook

* The Nifty started the session on a positive note and scaled a fresh all-time high of 16712. However, profit booking from all-time high levels dragged the index lower. As a result, daily price action formed a small bear candle carrying higher high-low, indicating stock specific action amid positive bias. In the process, broader market relatively outperformed

* Going ahead, we expect the index to maintain its northbound journey and gradually head towards our earmarked target of 16900. However, bouts of volatility owing to overbought conditions due to past three weeks 8% rally cannot be ruled out. Thus, couple of days breather from hereon would make market healthy should not be construed as negative. Instead dips should be capitalised on to accumulate quality stocks to ride move toward 16900 in coming month as it is 161.8% extension of mid-June rally (15450-15962) projected from July high of 15962

* The broader market indices extended pullback over second consecutive session after finding support in the vicinity of 50 days EMA. We expect Nifty midcap and small cap indices to maintain the rhythm of maturity of price/time wise correction. Since March 2020, broader market indices have not corrected for more than 10% and not more than three consecutive weeks. In the current scenario, over past two weeks both indices have corrected 6% and 10% from their lifetime highs. The supportive efforts in the vicinity of 50 days EMA make us believe the broader market indices would undergo base formation that would pave the way for next leg of up move

* Structurally, the formation of higher peak and trough on the larger degree chart makes us confident to retain support base upward at 16100, as it is confluence of:

* (a) Positive gap recorded on August 4 (16131-16176)

* (b) 10 week’s EMA is placed at 16100

* (c) past two week’s low is placed at 16162

In the coming session, the index is likely to open on a flat note tracking muted global cues. We expect index to pullback after initial dip and endure its upward momentum amid elevated volatility owing to expiry session. Hence use intraday dips towards 16560-16590 to create long for target of 16677.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35586

Technical Outlook

* The daily price action formed a high wave candle with a higher high -low signaling continuation of the uptrend . The index traded in a narrow range after Tuesday strong up move .

* Going ahead, we expect the index to maintain positive bia s and head towards the upper band of the recent consolidation placed around 36300 levels in the coming sessions

* We believe the overall structure remain positive and any corrective dips on account of the monthly expiry will provide fresh entry opportunity in quality banking stocks

* In the last 14 sessions the index has retraced just 61 . 8 % of its previous five sessions up move (34115 -36219 ) . A shallow retracement highlights a higher base formation and a positive price structure

* The index has immediate support base at 34500 levels as it is confluence of :

* (a) 80 % retracement of the current up move (34115 -36317 ) placed around 34500 levels

* (b) rising 100 days EMA placed around 34520 levels

* Among the oscillators, the daily stochastic has rebounded from the oversold territory and has recently generated a buy signal moving above its three periods average thus validates positive bias 3

* In the coming session, index is likely to open on a flat to negative note amid muted global cues . Volatility is likely to be high on account of the monthly expiry . We expect the index to trade in a range with positive bias while holding above 35300 levels . Hence use intraday dips towards 35390 —35450 for creating long position for target of 35720 , maintain a stoploss of 35260

Nifty Bank Index – Daily Candlestick Chart

To Read Complete Report & Disclaimer Click Here

https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer