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NSE (Nifty): 16624

Technical Outlook

* After an initial dip, the index regained upward momentum and marched northward, helping the Nifty to record highest closing at 16624. The daily price action formed a bull candle carrying higher high-low, indicating continuance of positive bias. The Nifty small cap index snapped past six sessions losing streak and settled on a positive note for the session, highlighting supportive efforts in the vicinity of 50 days EMA

* Going ahead, we reiterate our positive stance and expect the Nifty to gradually head towards 16900. However, bouts of volatility ahead of monthly expiry cannot be ruled out after seeing 8% rally over the past three weeks. Thus, a temporary breather from here on should be capitalised on to accumulate quality stocks to ride move toward 16900 in coming month as it is 161.8% extension of mid-June rally (15450-15962) projected from July high of 15962

* The move in broader market indices was in tandem with global peers and in sync with their own rhythm of maturity of price/time wise correction. Since March 2020, broader market indices have not corrected for more than 10% and not more than three consecutive weeks. In the current scenario, over the past two weeks both indices have corrected 6% and 10% from their lifetime highs. The supportive efforts in the vicinity of 50 days EMA make us believe the broader market indices would undergo base formation that would pave the way for next leg of up move

* Structurally, the formation of higher peak and trough on the larger degree chart makes us confident to retain support base upward at 16100, as it is confluence of:

* (a) Positive gap recorded on August 4 (16131-16176)

* (b)10 weeks EMA is placed at 16100

* (c) past two week’s low is placed at 16162

In the coming session, the index is likely to open on a positive note tracking positive global cues. We expect index to endure its upward momentum amid elevated volatility ahead of monthly expiry. Hence use intraday dips towards 16600-16630 to create long for target of 16715.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35712

Technical Outlook

* The daily price action formed a strong bull candle with a higher high -low and a close above the Friday’s gap down area signalling resumption of up move after recent corrective decline

* Going ahead, we expect the index to maintain positive bias s and head towards the upper band of the recent consolidation placed around 36300 levels in the coming sessions

* The index on expected lines maintained the rhythm of not correcting more than four consecutive session as seen since April 2021 and witnessed a strong pullback on Tuesday session signalling positive structure

* In the last 13 sessions the index has retraced just 61 . 8 % of its previous five sessions up move (34115 -36219 ) . A shallow retracement highlights a higher base formation and a positive price structure

*The index has immediate support base at 34500 levels as it is confluence of :

* (a) 80 % retracement of the current up move (34115 -36317 ) placed around 34500 levels

* (b) rising 100 days EMA placed around 34480 levels

* Among the oscillators, the daily stochastic has rebounded from the oversold territory and has generated a buy signal moving above its three periods average thus validates positive bias

* In the coming session, index is likely to open on a positive note amid firm global cues . We expect the index to trade with positive bias while maintaining higher high -low . Hence use intraday dips towards 35610 —35670 for creating long position for target of 35920 , maintain a stoploss of 34490

Nifty Bank Index – Daily Candlestick Chart

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