IGI Logo

NSE (Nifty): 15924

Technical Outlook

* The Nifty started the weekly expiry session on a buoyant note and marched northward helping it to finally resolve out of one month consolidation (15900-15500). As a result, our buy on dips strategy worked well. The daily price action formed a bull candle carrying higher high-low over fourth consecutive session, indicating extension of positive momentum. In the process, Bank Nifty recorded breakout from six weeks consolidation

* On expected lines, rejuvenated traction in Nifty IT and BFSI (which cumulatively have 54% weightage in the Nifty) helped the Nifty to log a resolute breakout from prolonged consolidation (15900- 15500), indicating resumption of primary up trend. Going ahead, we expect the index to extend the up move towards our earmarked target of 16100 in coming weeks. In the process, bouts of volatility would offer incremental buying opportunity. Thus, dips from here on should be capitalised on to accumulate quality stocks amid Q1FY22 earning season. Our earmarked target of 16100 is based on following observations:

* a) price parity of post Budget rally (13597-15432), projected from April low of 14151, at 16055

* b) past two month’s range (15140-14150) breakout target at 16120 

* The Nifty midcap and small cap indices endured their record setting spree over fourth consecutive session, highlighting broader market outperformance. The formation of higher peak and trough supported by strong market breadth signifies inherent strength which augurs well for durability of ongoing up move

* Structurally, the breakout from past one month consolidation has confirmed the strong higher base formation at 15600-15500 zone as it is confluence of:

* a) 61.8% retracement of past four week’s rally (15145-15915), at 15440

* b) 10 weeks EMA placed at 15557

* In the coming session, we expect index to trade with a positive bias. The formation of higher high-low over past four sessions highlights elevated buying demand as intraday dips were short lived. Hence, use intraday dip towards 15910-15932 to create long for target of 16021

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 35907

Technical Outlook

* The daily price action resulted in a bull candle with a higher high -low and a close above the last six weeks range 35800 - 34000 signalling strength and continuation of the up move .

* Going ahead, we expect the index to maintain positive bias and head towards 36200 levels in the coming sessions as it is the 80 % retracement of the February – April 2021 decline (37708 -30405 ) . A follow trough strength above 36200 will open further upside in the coming weeks

* Index on expected lines generated a breakout above the last six weeks range as mentioned in earlier edition that price action has been contracting over past few sessions suggesting that breakout from this consolidation is approaching . We expect index to breakout on the higher side given shallow retracement and robust price structure

* The formation of higher high -low in the weekly time frame gives us confident to revise the support base higher to 35000 levels being the confluence of the following technical observations :

* (a) The 61 . 8 % retracement of the current up move (34632 - 35985 ) placed at 35100 levels

* (b) The value of the rising demand line joining major lows since May 2020 is placed around 34960

* (c) The rising 50 days EMA is also placed at 34780 levels

* In the coming session, the index is likely to open on a flat to positive note amid mixed Asian cues . W e expect the index to trade with positive bias while maintaining higher high -low . Hence use intraday dips towards 35830 -35890 , for creating long position for target of 36120 , maintain a stoploss of 35720

* Among the oscillators the daily stochastic remain in rising trend thus supports the positive bias in the index

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