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NSE(Nifty):15879

Technical Outlook

* Fag end buying demand helped the index recoup last sessions decline and eventually close at all-time high after 15 sessions, highlighting rejuvenation of upward momentum. The daily price action formed a bull candle with small lower shadow, indicating elevated buying demand. In the process, stock specific action prevailed as broader market relatively outperformed

* In line with our view, Bank Nifty regained upward momentum and geared up to resolve above past six weeks consolidation (35800-33910). We believe, the rejuvenated traction in Banking, IT and Metal would help the Nifty resolve out of upper band of consolidation (15900) and head towards our target 16100 in coming weeks as it is confluence of:

* a) price parity of post Budget rally (13597-15432), projected from April low of 14151, at 16055 b) past two month’s range (15140- 14150) breakout target at 16120

* Key point to highlight over past four weeks is that, the subsequent declines are getting shallower in magnitude, as the last decline of 280 points was narrower compared to mid-June decline of 450 points, highlighting elevated buying demand. Therefore, even in case of breather from hereon we expect it to remain shallower and short lived compared to end of June decline (280 points). Therefore, dips should be capitalised as incremental buying opportunity ahead of Q1FY22 result season

* The midcap index has regained momentum after couple of weeks breather and currently trading in the vicinity of all time highs. We believe, the broader market indices have formed a higher base that has set the stage for next leg of up move. We expect broader market to eventually accelerate the relative outperformance against benchmark

* Structurally, we believe past five week’s consolidation helped index to form a higher base at 15600-15500 zone, which we do not expect to be breached as it is confluence of:

* a) 61.8% retracement of past four week’s rally (15145-15915), at 15440 b) past four week’s low is at 15450 In the coming session, we expect index to trade with a positive bias post soft opening amid elevated volatility owing to weekly derivative expiry. Hence, use intraday dip towards 15800-15825 to create long for target of 15913

NSE Nifty Daily Candlestick Chart 

Nifty Bank: 35771

Technical Outlook

* The daily price action resulted in a bull candle with a higher low signalling continuation of the up move for the fourth consecutive session . The index in the process registered a breakout above the falling channel containing the last four weeks corrective decline signalling resumption of the up move on expected lines .

* Going ahead, we expect the index to maintain positive bias and head towards 36200 levels in the coming weeks as it is the confluence of the 80 % retracement of the February – April 2021 decline (37708 -30405 ) that coincide with price parity of late April swing (30405 -34287 ) as projected from the recent trough of 32115

* On a smaller time frame the index has witnessing a strong up move in the current week after a shallow retracement as it has retraced just 50 % of its May rally (32115 -35810 ) over past four weeks

* The formation of higher high -low in the weekly time frame gives us confident to maintain the support base at 34500 being the confluence of the following technical observations :

* (a) The 61 . 8 % retracement of the recent up move (33908 - 35576 ) placed at 34500 levels

* (b) The value of the rising demand line joining major lows since May 2020 is placed around 34490 .

* (c) The rising 50 days EMA is also placed at 34520 levels

* In the coming session, the index is likely to open on a negative note amid soft Asian cues . Volatility is likely to be high on account of the weekly expiry, however w e expect the index to trade with positive bias while maintaining higher high -low . Hence use intraday dips towards 35580 -35640 , for creating long position for target of 35880 , maintain a stoploss of 35470

* Among the oscillators the daily stochastic remain in strong up trend thus validates positive bias in the index

Nifty Bank Index – Daily Candlestick Chart

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