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Nifty: 16498

Technical Outlook

• The Nifty started weekly expiry session with a positive gap (16478- 16768). However, failed to surpass 16800 mark and underwent profit booking. As a result, daily price action formed a bear candle that confined within Monday’s trading range, highlighting range bound activity. In the process, Index retraced 80% of Monday’s sharp up move (16356-16815)

• Key point to highlight is that, Nifty has been retreating from immediate resistance of 16800 mark over past five sessions in a row and today likely to witness gap down opening tracking escalating geopolitical issues. Going ahead, 16200 will be the key level to watch for the Nifty, as holding above 16200 (on a closing basis) will keep pullback option open. However, a decisive close below 16200 would lead to extended correction towards 15800 in coming weeks amid elevated global volatility

• As per change of polarity concept earlier support of 16800 would continue to act as an immediate resistance. Thus, only a decisive close above 16800 along with cool off in VIX will add fuel to the ongoing pullback rally

• Structurally, in a secular bull market 52 weeks EMA offers strong support. Historically, sustaining in the vicinity of 52 weeks EMA has offered decent returns over medium term. In current scenario index has approached in the vicinity of 52 weeks EMA along with oversold conditions that augurs well for impending pullback. Hence, on the downside 15800 would act as key support as it is confluence of:

• a) The breakdown implication of past four weeks consolidation (17795-16810) is placed around 15800

• b) 61.8% retracement of April-October rally (14150-18600) is placed around 15800

• The Nifty midcap and small cap indices are hovering in the vicinity of key long term average of 52 weeks EMA. We expect broader market to undergo base formation amid ongoing global volatility In the coming session, index is likely to open gap down amid weak Global market. Volatility is likely to remain high on account of the volatile global cues. The breach of Monday’s low of 16350 signifies corrective bias. Hence, post gap down opening use intraday pullback towards 16370-16400 for creating short position for target of 16283

Nifty Bank: 34944

• The daily price action formed a bear candle with an upper shadow as the index reacted lower from the Wednesday bearish gap area (35850 -3553 ) signalling corrective bias . The index need to start forming higher high -low on a sustained basis and close above Wednesday gap down area for any technical pullback to materialise in the coming sessions

• Going ahead volatility is expected to remain high tracking ongoing geopolitical concerns and FOMC meeting . Index has major support placed around 34000 levels . Holding above the same will keep pullback option open towards 36700 levels in the coming weeks being the recent breakdown area and 38 . 2 % retracement of the current decline (39424 -34721 )

• The index has support around 34000 levels being the confluence of the following :

• (a) lower band of the rising channel in place since last one year is placed around 34500 levels

• (b) the rising 52 weeks EMA is placed at 34688 levels

• (c) the previous major lows December 2021 is also placed around 34000 levels

• Among the oscillators the weekly stochastic is approaching oversold territory with a reading of 24 , signaling supportive effort is likely at lower levels in the coming weeks

In the coming session, index is likely to open gap down amid weak Global market . Volatility is likely to remain high on account of the volatile global cues . Intraday bias remain down below 35000 levels, hence after a negative opening use intraday pullback towards 34870 -34930 for creating short position for target of 34630 , maintain a stop loss at 35040

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