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NSE (Nifty): 17889

Technical Outlook

* The Nifty started the session on a positive note and surpassed psychological mark of 18000. However, it subsequently failed to sustain at higher levels, leading it to settle below 17900 mark. The daily price action formed a small bear candle carrying higher highlow, indicating lacklustre momentum amid stock specific action. In the process, broader market outperformed as Nifty midcap and small cap indices gained ~1%, each

* The lack of faster retracement on either side signifies prolonged consolidation that would help the index to forma higher base while sustaining above Friday’s panic low 17613. In the process, stock specific action would prevail as we expect broader market to relatively outperform amid progression of Q2FY22 earning season. Key point to highlight since May 2020 is that, time wise index has not corrected for more than two to three consecutive weeks. In current scenario, the index has already corrected in past two weeks. We expect it to maintain the rhythm by arresting ongoing correction in couple of weeks. Hence, ongoing corrective phase should not be construed as negative, instead dips should be capitalised on to accumulate quality stocks

* The broader market indices has been regaining upward momentum after finding support from 50 days EMA. We believe, Nifty midcap and small cap indices are approaching price/time maturity of corrective phase. Since May 2020, both indices have not corrected for more than 9-10% and arrested intermediate correction within three weeks. We expect both indices to maintain same rhythm and form a higher base in the vicinity of 50 days EMA. Hence, focus should be on accumulating quality midcaps

* Structurally, we believe ongoing corrective phase to get arrested around 17500 as it is confluence of:

* a) 50 days EMA is placed at 17575

* b) October 2021 low is placed at 17452

In the coming session, the index is likely to open on a flat note amid muted Asian cues. We expect, index to trade with a positive bias amid elevated volatility ahead of weekly expiry. Hence, use dip towards 17870-17905 for creating long position for target of 17987

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 39938

Technical Outlook

* The daily price action formed a high wave candle which maintained higher high -low signaling range bound trade around the 40000 levels after Monday’s strong up move . The last two sessions pullback signals the index has maintained the rhythm of not correcting for more than four consecutive sessions as seen since April 2021

* Going ahead, the formation of higher high -low along with decisive close above (40000 ) would open the door for extended pullback towards 40500 levels . Failure to do so would lead to base formation in the broad range of 38400 - 40500 wherein we expect the index to hold above the Friday’s panic low (38426 ) on a closing basis

* We believe the current breather should not be seen as negative instead it should be capitalized to accumulate quality banking stocks for the next leg of up move

* The short term support base for the index is placed at 38000 - 38400 levels being the confluence of :

* 80 % retracement of the recent up move (36876 -41829 )

* the upper band of the recent seven months range breakout area • the rising 50 days EMA is also placed at 38155 levels

* The daily stochastic has generated a buy signal moving above its three periods average as it rebounds from near the oversold territory thus supports the positive bias in the index in the coming sessions

* In the coming session, index is likely to open on a flat to positive note amid mixed Asian cues . We expect, the index to trade in a range with positive bias . Hence, use intraday dip towards 39840 -39900 for creating long position for the target of 40140 , maintain a stoploss of 39720

Nifty Bank Index – Daily Candlestick Chart

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