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NSE(Nifty): 15108

Technical Outlook

* The Nifty witnessed a gap up opening (14923-15044) above the psychological mark of 15000 and sustained well above it throughout the session that helped index to resolve out of past two months consolidation (14900-14400). As a result, our buy on dips strategy worked well. The daily price action formed a significant bull candle carrying higher high-low, indicating acceleration of upward momentum.

* The two months consolidation breakout backed by improving market breadth signifies rejuvenation of upward momentum amid broad based participation that makes us believe, index would endure its northbound journey and eventually retest life high of 15400 in the month of May 2021 (as discussed in the Monthly Technical outlook report). Thereby, any temporary cooloff from hereon should be capitalised to accumulate quality stocks as the Q4FY21 result season progresses

* Key point to highlight is that, the Nifty midcap and small cap indices endured their relative outperformance and scaled to a fresh 52 weeks high, highlighting inherent strength. We expect, broad market to accelerate their relative outperformance wherein catch up activity would be seen in small cap index, as Nifty midcap index is currently trading at all time high whereas small cap index is still 6% away from life highs

* Structurally, the formation of higher base signifies elevated buying demand that makes us confident to revise support base upward at 14600 as it is confluence of:

* a) 61.8% retracement of current up move (14151-15137), at 14530 

* b) Last week’s low is placed at 14592

* In the coming session, index is likely to open on a subdued note tracking muted global cues. We expect index to hold the psychological mark of 15000 and attempt a pullback. Hence, use intraday dip towards 15025-15052 to create long for target of 15139.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 33922

Technical Outlook

* The daily price action formed a high wave candle with a bullish gap below its base (33459 -33730 ) signalling positive bias as the index formed a higher high -low for the second consecutive session

* Key observation is that the index has registered a breakout above a falling supply line joining major highs of the last three months highlighting resumption of the up move towards our medium term target of 34900 levels in the coming weeks as it is the 61 . 8 % retracement of the entire recent decline (37708 - 30405 )

* The index has immediate support at 32000 levels being the confluence of the last two weeks low and the 61 . 8 % retracement of the previous up move (30405 -34287 )

* The index in the last two weeks has formed a higher base above the 61 . 8 % retracement of the preceding two weeks up move (30405 -34287 ) . A shallow retracement highlights higher base formation and a positive price structure

* 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 open on a soft note amid weak global cues . We expect the index to sustain above Tuesday gap up area (33605 -33801 ) and trade with positive bias . Hence after a negative opening use dips towards 33630 -33690 for creating long position for the target of 33930 , maintain a stoploss of 33520 • Among the oscillators, the daily stochastic is in uptrend and has generated a buy signal moving above its three periods average thus supports the positive bias in the index in the coming sessions

Nifty Bank Index – Daily Candlestick Chart

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