IGI Logo

NSE (Nifty): 16931

Technical Outlook

* The Nifty started the week with a positive gap (16705-16765) and inched northward throughout the session as intraday pullbacks were short lived. As a result, daily price action formed a sizable bull candle carrying higher high-low, indicating acceleration of upward momentum.

* Going ahead, we reiterate our constructive stance of Nifty heading towards our revised target of 17200 in coming month. Key point to highlight is that, the Bank Nifty (which carries 37% weightage in Nifty) has logged a resolute breakout from past three weeks consolidation (36300-34800), indicating resumption of upward momentum. We believe the revived traction in banking stocks would drive Nifty towards 17200 as it is based on:- since January 2021, twice the Nifty has seen 1800 points rally (during JanuaryFebruary=1835 points and April-June=1764 points). In the current scenario, the Nifty would complete 1800 points at 17200 projected from June low of 15450

* On expected lines, broader market indices staged a strong pullback after maintaining the rhythm of not correcting for more than 10% and arresting corrective phase within three weeks in a row, since April 2020. 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 to retest the life highs in coming weeks

* Structurally, the formation of higher peak and trough on the larger degree chart makes us confident to revise support base upward at 16400, as it is confluence of:

* (a) 61.8% retracement of current up move of 16162-16951

* (b) past two week’s identical low is placed at 16400

In the coming session, the index is likely to open gap up amid buoyant global market. We expect index to trade with positive bias and maintain a higher high-low formation. Hence use intraday dips towards 16880-16905 to create long for target of 16993.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 36347

Technical Outlook

* The price action on Monday formed a strong bull candle which emerged above past 4 month consolidation range (36300 -34800 ) . Prices retraced preceding 10 session decline in 5 session indicating resumption of uptrend after higher base formation

* Going ahead, we expect the index to head towards 37700 levels in the coming month as it is the confluence of the measuring implication of the recent range (36300 -34800 ) and the previous all -time high of February 2021

* In the smaller time frame the index in the last 15 sessions 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

* We do not foresee index to breach strong support of 34500 . Buying the declines strategy has worked well over past 15 months . Hence, any corrective decline in the coming week would offer incremental buying opportunity in quality banking stocks . The support base of 34500 is the confluence of the : (a) 80 % retracement of the current up move (34115 - 36317 ) placed around 34500 levels (b) rising 20 weeks EMA also placed around 34614 levels (c ) the last two weeks’ lows are also placed 34800 levels

* Among the oscillators, weekly stochastic rebounded from the neutral reading of 50 and is seen forming a base above its average thus validates positive bias

* In the coming session, index is likely to open on a flat note amid muted global cues . We expect the index to trade with positive bias while maintaining higher high -low . Hence use intraday dips towards 36280 —36340 for creating long position for target of 36610 , maintain a stoploss of 36160

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