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NSE (Nifty): 15768

Technical Outlook.

* The daily price action formed a bear candle carrying lower highlow, indicating breather as profit booking seen in recently ran up stocks amid overbought conditions in the vicinity of life-time high

* We believe extended breather after past eight weeks 12% rally (14151-15902) would make markets healthy by cooling off the overbought conditions (currently weekly stochastic oscillator is placed at 93) and gradually pave the way to head towards our earmarked target of 16100 in June 2021 as it is confluence of:

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

* b) past 2 month’s range (15140-14150) breakout target at 16120

* We believe intermediate bouts of volatility should not be construed as negative. Instead, traders can use temporary breather to their advantage to build long positions by accumulating quality large cap and midcap stocks, as we observe elevated buying demand around 15500 over two weeks. The banking index has undergone healthy consolidation and poised at key support. We believe the Bank Nifty should protect downsides for the index in case of profit booking in recently run up stocks

* In line with benchmark index, broader market indices underwent profit booking in the vicinity of all time-high. Over past four weeks, Nifty midcap, small cap indices have rallied ~12% pulling weekly stochastic oscillator in overbought territory (placed around 94), indicating couple of days breather cannot be ruled out

* Structurally, we believe Nifty has strong support in range of 15400. We do not expect it to be breached. Hence, any dip toward 15400 should be capitalised on as incremental buying opportunity as it is confluence of: a) as per change of polarity concept, earlier resistance of 15400 would now act as key support b) 61.8% retracement of past three week’s rally (15145-15902), at 15435

* In the coming session, index is likely to witness gap down opening tracking weak global cues. We expect Nifty futures to bounce from intraday key support of 15650 levels and witness stock specific action amid expiry induced volatility. Hence, use intraday dip towards 15660-15690 to create long for target of 15774.

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 35003

Technical Outlook

* The daily price action formed a small bear candle which mostly remained contained inside previous session price range signalling consolidation with corrective bias after last two sessions pullback . The index is currently placed at the upper band of the falling channel containing the recent breather . A follow through strength above the same will signal resumption of up move

* Goining ahead, we believe the current breather should be used as an buying opportunity for up move towards our target of 36200 in June 2021 as it is the confluence of the 80 % retracement of the entire last three months corrective decline (37708 -30405 ) and the price parity with previous up move (30405 -34287 ) as projected from the recent trough of 32115 signalling upside towards 36200 levels

* In a smaller time frame the index has witnessed a shallow retracement as it has already taken 11 sessions to retrace just 50 % of its preceding eight sessions up move (33274 -35714 ) . A shallow retracement highlights a robust price structure and a higher base formation

* We do not foresee the index breaching the crucial support area of 34400 -34000 as it is confluence of the following technical observations :

* (a) 38 . 2 % retracement of the current up move (32115 -35810 ) placed at 34400

* (b) the recent breakout area and the April high (34287 )

* (c) The rising 50 days EMA placed at 34159 levels

* (d) The value of the rising demand line joining lows of April 2021 and May 2021 is placed around 34500

* In the coming session, the index is likely to open on a negative note amid soft global cues . We expect the index to hold above Monday’s low (34455 ) and consolidate in a range . Hence, use dips towards 34560 -34620 for creating long position for the target of 34840 , maintain a stoploss of 34450

* Among the oscillators the daily Stochastic is in up trend thus supports the positive bias in the index in coming sessions

Nifty Bank Index – Daily Candlestick Chart

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