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Nse (Nifty): 14942

Technical Outlook

* The Nifty started the week with a positive gap (14823-14928) and sustained above the same throughout the session as intraday dips were bought into. As a result, daily price action formed a bull candle with a small lower shadow, highlighting elevated buying demand. In the process, Nifty closed above 14900 mark for the first time since March 15, highlighting rejuvenation of upward momentum

* The index has resolved out of past two weeks double bottom formation (14900-14400), indicating resumption of primary up trend. Thereby, we reiterate our positive stance on the market and expect the Nifty to eventually head towards life-time high of 15400 in May 2021. However, a move towards 15400 would not be linear in nature, as bouts of volatility owing to escalating concerns over Covid-19 2nd wave. Therefore, intermediate dips toward 14700-14600 should be capitalised on as an incremental buying opportunity in quality large cap and midcaps

* On expected lines, the broader market indices have accelerated their relative outperformance after resolving out of past two months consolidation and clocked a fresh 52 weeks high. Going ahead, we expect small cap index to witness catch up activity as the midcap index is placed at all time high, whereas small cap index is still 8% away from life highs. Therefore, we expect the ongoing relative outperformance of broader markets to endure amid progression of Q4FY21 earnings

* Structurally, we do not expect index to breach the key support threshold of 14200. Despite elevated volatility owing to concern over second Covid-19 wave, index has managed to hold the key support of 14200 and formed a higher base. Hence 14200 would continue to act as a key support as it is confluence of

* a) 100 days EMA is placed at 14280

* b) last month’s low is placed at 14151

In the coming session, Nifty future is likely to open with a negative gap tracking subdued global cues. However, post gap down opening we expect index to witness a pullback, hence use intraday dip towards 14735-14757 to create long for target of 14848.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 33142

Technical Outlook

* The daily price action formed a small bull candle with higher high low indicating extended pull back and in the process generated follow through strength above last week high after forming higher base above the 61 . 8 % retracement of previous two week up move (30405 -34287 )

* We reiterate our positive stance with target of 34900 levels, in coming weeks as it is the 61 . 8 % retracement of the entire last two months decline (37708 -30405 ) . In the current truncated week any decline towards 32000 -32400 would attract strong buying demands

* • Key point to highlight is that over the past seven sessions the index has retraced just 61 . 8 % of preceding seven sessions up move (30405 -34287 ) . The slower pace of retracement indicates a higher base formation

* The slower pace of retracement after the recent up move of 3880 points, which is the larger in magnitude compared to late February rally of 2256 points highlights robust price structure and the current consolidation should be used as an incremental buying opportunity in quality banking stocks

* The index has immediate support at 32000 -31500 levels being the confluence of the last two weeks low and the 61 . 8 % retracement of the current up move (30405 -34287 ) . While the major support is placed in the range of 30500 -30000 levels • The index has maintained the rhythm of not correcting more than 20 % as witnessed since March 2020 . In the current scenario, it rebounded after correcting 19 % from the all -time high (37708 ) . Hence it provides favourable risk -reward setup for the next leg of up move

* In the coming session, the index is likely to witness gap down opening tracking subdued global cues . However, post initial decline we expect supportive efforts to emerge around 32400 . Hence use dips towards 32510 -32570 for creating long position for the target of 32820 , maintain a stoploss of 32390

Nifty Bank Index – Weekly Candlestick Chart

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