IGI Logo

NSE (Nifty): 17930

Technical Outlook

* The Nifty started Monday’s session on a positive note and continued to march upward throughout the session as intraday pullbacks were short lived. The daily price action formed a bull candle with small lower shadow carrying higher high-low, indicating a pause in downward momentum

* Going ahead, follow through strength and a decisive close above Monday’s high would lead to extended pullback towards 18200 in the ongoing truncated week. Failure to do so would lead to base formation while sustaining above Friday’s panic low 17613. in the process, stock specific action would prevail amid progression of Q2FY22 earning season. We believe, such a base formation after 20% rally (seen over past three months) that would make market healthy. Hence, ongoing corrective phase should not be construed as negative, instead dips should be capitalised on to build quality portfolio over medium term

* Key point to highlight since May 2020 is that, time wise index has not corrected for more than two to three consecutive weeks. In current scenario, index has already corrected in past two weeks. We expect it to maintain the rhythm by arresting ongoing correction in couple of weeks.

* The broader market indices bounced after retracing back to 50 days EMA. We believe, Nifty midcap and small cap indices are approaching price/time maturity of corrective phase. Since May 2020, both indices have not corrected for more than 9-10% and arrested intermediate correction within three weeks. We expect both indices to maintain same rhythm and form a higher base in the vicinity of 50 days EMA. Hence, focus should be on accumulating quality midcaps

* Structurally, the formation of higher peak and trough on the larger degree chart signifies robust price structure that makes us believe that ongoing breather would find its feet around 17500 as it is confluence of: a) 50 days EMA is placed at 17560 b) October 2021 low is placed at 17452

In the coming session, the index is likely to open on a flat note amid mixed Asian cues. We expect, index to trade with a positive bias while maintaining higher high-low formation. Hence, use dip towards 17950- 17980 for creating long position for target of 18067

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 39764

Technical Outlook

* The daily price action formed a bull candle carrying higher high -low with small lower shadow, highlighting pause in downward momentum after past consecutive three sessions decline that hauled daily stochastic oscillator near oversold territory . As a result, index maintained the rhythm of not corrected for more than four consecutive sessions, since April 2021

* Going ahead, the formation of higher high -low along with decisive close above previous sessions high (39862 ) would open the door for extended pullback towards 40500 . Failure to do wo would lead to base formation 38400 -40500 wherein we do not expect index to hold the Friday’s panic low (38426) on a closing basis in the coming truncated week

* We believe the current breather should not be seen as negative instead it should be used to accumulate quality banking stocks .

* The short term support base for the index is placed at 38000 - 38400 levels being the confluence of :

* 80 % retracement of the recent up move (36876 -41829 )

* the upper band of the recent seven months range breakout area

* the rising 10 weeks EMA is also placed at 38370 levels

* Weekly stochastic placed at its three periods average suggest consolidation with positive bias in the coming weeks

* In the coming session, index is likely to open on a flat note amid mixed Asian cues . We expect, the index to trade in a range with positive bias . Hence, capitalise dip towards 39870 -39930 for creating long position for the target of 40170 , maintain a stoploss of 39770

Nifty Bank Index – Weekly Candlestick Chart

To Read Complete Report & Disclaimer Click Here

https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer