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Nifty: 17340

Technical Outlook

* The index started Monday’s session with a positive gap (17102-17301) and inched northward as intraday pullback remained short lived. As a result, daily price action formed a bull candle carrying higher high-low, indicating continuance of positive bias

* The index has underwent decent price/time correction ahead of event. Thus, we expect the index to gradually head towards immediate resistance of 17600 levels from oversold zone. A decisive move above 17600 would drive Nifty higher towards 17900 in coming weeks. The benchmark indices witnessed strong buying demand from the 80% retracement of the previous up move (16410-18350) despite rise in global volatility and continuous FII selling. Time wise, since May 2020 the index has not closed negative for more than two successive weeks. At the current juncture, with two weeks of losses already behind us, the index is poised for a technical pullback in line with past 22 month rhythm. Therefore, any dips towards the 17100-17200 levels provide an incremental buying opportunity to ride move towards 17900 as it is 61.8% retracement of recent corrective phase (18350-16836)

* The Bank Nifty has been outperforming the benchmark Nifty since beginning of this year and also within ongoing corrective phase, highlighting inherent strength. We believe, a revived traction in banking stock would drive Nifty higher as Bank Nifty carries 36% weightage in Nifty

* Structurally, Nifty managed to hold the key support of 16800 while sustaining around 100 days EMA, despite elevated global volatility. On multiple occasions Nifty has managed to hold 100 days EMA (on closing basis), since June 2020. In current scenario, as well index is sustaining above it. Thereby, we believe last weeks low of 16800 would act as key support as it coincides with 80% retracement of December-January rally (16410-18350), placed at 16798

* The broader market indices are forming a higher base in the vicinity of 100 days EMA. We believe, the extended consolidation from hereon would make broader market heathy

* In the coming session, index is likely to open on a positive note amid strong global cues. We expect, the volatility to remain elevated on account of the Union Budget. Hence use intraday dip towards 17390-17422 for creating long position for target of 17507

 NSE Nifty Weekly Candlestick Chart

Nifty Bank: 37975

Technical Outlook​​​​​​​

* The daily price action formed a high wave candle which remained enclosed inside Friday’s price range signaling consolidation with positive bias . Bank Nifty since the start of the CY22 has been relatively outperforming the Nifty which we expect to continue in the coming weeks

* Going ahead we expect the index to maintain positive bias and test its January 2021 high of 38850 levels in the coming weeks . Volatility is expected to be elevated around Union Budget 2022

* The index has retracing 80 % of its last eight sessions decline (38855 -36375 ) in just four session signaling an overall positive bias

* The index has immediate support at the 36000 -36500 levels being the 50 % retracement of the previous rally (34018 -38855 ) and the value of the rising 200 days SMA placed at 36120 levels

* Bank Nifty/Nifty ratio chart has started forming higher high -low in weekly time frame and is seen reversing from last one year falling channel highlighting resumption of Bank Nifty outperformance in relative to Nifty

* Among the oscillators the daily stochastic remain in up trend thus supports the positive bias in the index in the coming sessions

* In the coming session, index is likely to open on a positive note amid strong global cues . Volatility is likely to remain high on account of the Union Budget . We expect the index to trade with positive bias while holding above 38000 levels . Hence after a positive opening use intraday dips towards 38100 -38170 for creating long position for the target of 38470 , maintain a stop loss at 37990

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