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NSE (Nifty): 17855

Technical Outlook

* The Nifty started the week on a positive note, however minor profit booking in the vicinity of psychological mark of 18000 over second consecutive session pulled index lower. The daily price action formed a bear candle with small lower shadow, indicating pause in upward momentum near 18000 mark. Meanwhile, stock specific action prevailed.

* Going ahead, we reiterate our positive stance and expect Nifty to surpass the psychological mark of 18000 that would eventually pave the way to head towards 18200 in coming month as it is implied target of recent consolidation breakout (17800-17325). In the process, bouts of volatility owing to monthly derivative expiry can not be ruled out. Thus, temporary breather from hereon should not be construed as negative instead dips should be used as incremental buying opportunity as we do not expect Nifty to breach 17400 mark. Our constructive stance on the market is based on following observations:

* a) The rallies are getting elongated followed by shallow corrections as intermediate corrections have been arresting within 3-4% since April 2021, highlighting robust price structure

* b) Indian equities are expected to extend its relative outperformance to global peers as it endured its record setting spree

* We expect, broader market indices to undergo healthy consolidation after ~15% rally seen over past four weeks. In the process, stock specific action would continue with unlock, housing and festive beneficiary themes to be in focus. Thus, dips should be capitalized to accumulate quality stocks

* Structurally, the formation of higher peak and trough signifies up trend as per classical Dow Theory. Going ahead, we do not expect index to breach 17400 as it is confluence of: a) 80% retracement of past two weeks up move (17269-17948) at 17405 b) 20 days EMA at 17398, which has been held since July 2021

In the coming session, index is likely to open on a positive note amid firm global cues. We expect it to endure its upward momentum. Hence, after a positive opening use intraday dips towards 17810-17840 for creating long position for target of 17928

NSE Nifty Daily Candlestick Chart

Nifty Bank: 38171

Technical Outlook

* The daily price action formed a bull candle with a higher high -low signaling continuation of the up move as it closed above 38000 levels for the first time ever .

* Going ahead, we expect the index to maintain positive bias and gradually head towards our target of 38600 in the coming sessions as it is the price parity with the previous two major up move of July (34115 -36317 ) and August (34817 -37140 ) each measuring roughly 2250 points added to the recent low of 36327 signals upside towards 38600 levels

* Volatility is likely to remain high in the coming week on account of the monthly expiry of the September series and the volatile Asian cues . Buying on decline strategy has worked well in the last 15 months, thereby the current volatility would present incremental buying opportunity in quality banking stocks

* The index has support base around | 36500 levels as it is the confluence of the following technical observations :

* 50 % retracement of the current up move (34817 -38112 ) placed around 36500 levels

* rising 10 weeks EMA also placed around 36480 levels

* The last week low is also placed at 36525 levels

* The weekly stochastic remain in strong up trend thus supports the positive bias in the index

* In the coming session, index is likely to open on a flat to positive note amid firm global cues . We expect the index to trade with positive bias while maintaining higher high -low, hence use intraday dips towards 38040 -38110 for creating long position for the target of 38330 , maintain a stoploss of 37940

Nifty Bank Index – Weekly Candlestick Chart

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