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NSE (Nifty): 14497

Technical Outlook

* The daily price action formed a bear candle carrying a higher high-low, indicating a breather after Monday’s sharp pullback (more than 250 points). In the process, stock specific action prevailed amid progression of Q4FY21 result season

* Going ahead, we expect the ongoing consolidation in the index to get prolonged in the broader range of 14900-14200. This would make the market healthy and pave the way towards 15400 in coming months. Therefore, extended breather from here on should be capitalised on as an incremental buying opportunity as we do not expect the index to breach the key support threshold of 14200

* We believe the index is undergoing healthy retracement as over the past three sessions it retraced 61.8% of preceding five sessions ~900 points up move which is larger in magnitude compared to early March rally of 868 points. The elongated up move followed by healthy retracement signifies robust price structure that augurs well for rejuvenation of upward momentum

* The Nifty small cap index underwent minor profit booking after scaling a fresh 52 weeks high. We expect broader market indices to maintain their relative outperformance wherein small cap would witness catch up activity as Nifty midcap index is hovering at its all-time high. In contrast, the small cap index is still 11% away from its lifetime highs

* Structurally, we believe the index has formed a higher base at key support threshold of 14200. We do not expect this to get breached. Hence, dips should be capitalised on as buying opportunity as level of 14200 is confluence of: a) Lower band of falling channel at 14200 b) 100 days EMA at 14238 c) April-21 low placed at 14151

* In the coming session, the index is likely to open on a positive note amid mixed global cues. We believe, stock specific action would remain in focus amid ongoing consolidation. Hence, use intraday dip towards 14500-14525 to create long for target of 14614.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 32270

Technical Outlook

* The daily price action formed a bear candle signalling lack of follow through to previous session bullish hammer candle . Only a move above Tuesday high (33011 ) will signal a pause in the current profit booking trend

* Going ahead, after a up move of more than 3800 points in just seven sessions, the index is likely to consolidate in the broad range of 31500 -34000 . Therefore dips should be capitalised as buying opportunity, as we expect index to head towards 34900 levels in the coming month being retracement of the entire decline (37708 -30405 ) .

* Key point to highlight is that, the recent up move (3880 points) is larger in magnitude compared to late February up move of 2256 points . The elongation of up move signifies rejuvenation of upward momentum that augurs well for next leg of up move . Therefore, the current temporary cool off should not be seen as negative instead it should be capitalised to accumulate quality banking stocks

* The index 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

* The index has immediate support at 32000 -31500 levels being the confluence of the previous week low and the 61 . 8 % retracement of the current up move (30405 -34287 ) . While the major support is placed in the range of 30500 -30000 levels

* In the coming session, the index is expected to open on a flat to positive note amid mixed global cues . We expect the index to hold above Monday’s low (31906 ) and trade with positive bias . Hence, use dips towards 32150 -32210 for creating long position for the target of 32440 , maintain a stoploss of 32040

Nifty Bank Index – Daily Candlestick Chart

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