IGI Logo

NSE (Nifty): 18267

Technical Outlook

* The daily price action formed a bear candle carrying lower highlow for the first time in October and filled Monday’s positive gap (18340-18445), indicating a pause in upward momentum after 1150 points rally seen over the past two weeks. In the process, broader market indices underperformed as the profit booking extended in recently ran up stocks

* We expect the ongoing healthy retracement of the index to get prolonged and the overbought condition of weekly stochastic oscillator (formed due to past three months 20% rally) to cool off and gradually form a higher base. Thus, couple of days breather from here on should not be construed as negative. Instead dips should be capitalised on to accumulate quality stocks amid progression of Q2FY22 result season as we do not expect the Nifty to breach the key support zone of 17800 levels

* The broader market indices have extended breather over second consecutive session. Key point to highlight since Match 2020 is that, the Nifty midcap, small cap indices have not corrected for more than 9-10%. In current scenario, as both indices have corrected 6% over past two sessions. We believe 3-4% correction from hereon cannot be ruled out, which would make broader market healthy and set the stage for next leg of up move

* Structurally, elongated rallies followed by shallow retracement highlights robust price structure that makes us believe that ongoing breather would find its feet around 17800 as it is confluence of: a) 61.8% retracement of past three weeks up move (17452-18604) b) 20 days EMA is placed at 17900 which has been held since April 2021

In the coming session, the index is likely to open on a flat to positive note tracking firm global cues. The formation of lower high-low signifies corrective bias. Hence, use pullback towards 18390-18420 for creating short position for target of 18302

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 39518

Technical Outlook

* The daily price action formed a high wave candle signaling lack of follow through to previous session profit booking . The index in the last two sessions is seen holding above the bullish gap area of Monday (39375 -39570), sustaining above which will keep the bias positive

* The index during previous week has logged a resolute breakout from past three week’s consolidation range (38300 - 36500 ) indicating strength that makes us confident of revising our target to 40500 levels as it is the confluence of the measuring implication of the last three weeks range breakout (38300-36500) and the 138.2% external retracement of the entire major decline of February -April 2021 (37708 -30406 ) placed at 40500 levels

* We expect the index to hold above the immediate support area of 38300 and any breather towards the same provides incremental buying opportunity

* Structurally, the formation of higher peak and trough in all time frames signifies robust price structure, that makes us confident to revise support base upward at 38300 levels as it is confluence of :

* The upper band of the last three weeks’ consolidation breakout area placed around 38300 levels

* 38 . 2 % retracement of the current up move 36877 -39374 is also placed around 38300 levels

* In the coming session, index is likely to open on a flat to positive note amid firm global cues . We expect the index to trade in a range with positive bias while consolidating its recent gains . Hence use intraday dips towards 39310 -39380 for creating long position for the target of 39630 , maintain a stoploss of 39190

Nifty Bank Index – Daily 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