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Nifty (17464)

Technical Outlook

• The Nifty witnessed a gap up opening (17267-17370) and throughout the day sustained above the same. As a result, daily price action formed a bull candle carrying higher high-low, indicating pause in downward momentum as index formed a higher high-low after four sessions decline

• The follow through strength above Tuesday’s high (17306) confirms resumption of upward momentum that makes us believe, Nifty would resolve higher towards 17600 in coming sessions as it is 80% retracement of recent decline (17794-17043. Thus, elevated volatility from hereon owing to RBI’s Monetary policy should be capitalised to accumulate quality stocks to ride next leg of up move

• Key point to highlight since October 2021 is that, the subsequent moves are getting contracted as index has not retraced more than 61.8 - 80% of its prevailing directional move, indicating lack of faster retracement. In the current scenario, buying demand emerged from 80% retracement of preceding five session’s up move (16836-17794) highlighting strong demand zone in the vicinity of psychological mark of 17000

• The broader market indices snapped four sessions decline, indicating conclusion of secondary correction. We believe, ongoing higher base formation above 100 days EMA would make broader market heathy and pave the way for next leg of up move

• Structurally, despite recent elevated volatility Nifty managed to hold the key support threshold of 16800 and now forming a higher trough, highlighting buying demand at elevated support base. We do not expect it to breach 16800 as it is confluence of :

• A) 80% retracement of December-January rally (16410-18350), placed at 16798

• B) Panic low recorded in January 2022 is placed at 16836

• In the coming session, we expect index to trade with a positive bias amid rise in volatility owing to RBI policy outcome coincided with weekly derivative expiry. Hence after a positive opening use intraday dips towards 17442-17478 for creating long position for target of 17563

Nifty Bank: 38610

Technical Outlook

• The daily price action formed a strong bull candle with a higher high -low signaling a positive follow trough to previous session hammer like candle . The index has already retraced 61 . 8 % of the last four sessions decline (39424 - 37319 ) in just one session highlighting positive bias . A follow through strength above Wednesday high (38648 ) post RBI monetary policy will signal a resumption of the primary up trend

• Buying demand on expected lines has emerged from the support area of 37500 -37000 . Going ahead, we expect the index to hold above the support area of 37500 -37000 and gradually head towards 40300 levels in coming weeks being the confluence of the 80 % retracement of the November - December 2021 decline (41829 -34019 ) and the 161 . 8 % external retracement of the recent breather (38855 -36375 )

• The index has immediate support at the 37500 -37000 levels being the confluence of the 100 days EMA (currently at 37260 ) and the 61 . 8 % & 80 % retracement of the previous up move (36375 -38802 )

• Among the oscillators, the daily stochastic has cooled off from the overbought territory and is currently placed at the neutral reading of 40

• In the coming session, index is likely to open on a positive note amid firm global cues . Volatility is likely to be high on account of the RBI monetary policy outcome and weekly expiry . However, we expect the index to trade with positive bias while maintaining higher high -low . Hence after a positive opening use intraday dips towards 38610 -38680 for creating long position for the target of 38940 , maintain a stop loss at 38490

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