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Nifty: 16248

Technical Outlook

• Contrary to our expectation, Nifty breached the key support threshold of 16800 tracking escalated geopolitical concerns. This led to spike in crude oil prices and VIX which eventually triggered elevated volatility in the equity market. Post gap down opening (17027-16549) index drifted southward as intraday pullback were remain short lived. The daily price action formed a sizable bear candle carrying lower high-low, indicating acceleration in downward momentum.

• Going ahead, strong support for the Nifty is placed at 15800. Key point to highlight is that, past four months 13% correction from life high of 18600 hauled weekly stochastic oscillator in oversold territory (currently placed at 20), indicating possibility of impending pullback can not be ruled out. In the process, only a decisive close above 16800 would lead to pause in downward momentum and open the door for meaningful pullback in coming weeks. We believe 15800 would act as key support as it is confluence of:

• a) The breakdown implication of past four weeks consolidation (17795-16810) is placed around 15800

• b) 61.8% retracement of April-October rally (14150-18600) is placed around 15800

• Meanwhile, as per change of polarity concept, recent key support of 16800 would now act as immediate resistance for the Nifty that coincided with 61.8% retracement of past two session decline (17220-16203), placed at 16832

• Mirroring the pessimistic sentiment of the benchmark, the broader market indices breached the key support threshold of 52 weeks EMA, indicating prolonged correction going ahead in Nifty midcap and small cap.

In the coming session, index is likely to witness gap up opening tracking strong global recovery. We expect index to pullback from oversold territory amid elevated volatility. Thus, use intraday dip towards 16310-16340 for creating long position for target of 16427

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35228

Technical Outlook

• The daily price action formed a sizable bear candle with a lower high and lower low and a bearish gap above its head (37318 -36709 ) signaling corrective bias as it closed below its last five weeks trading range (36500 -39000 ) and the 52 weeks EMA currently placed at 35500 levels .

• Going ahead, only a formation of higher high -low in the daily chart on a sustained basis and a close above Thursday gap down area will signal a pause in the current corrective trend . A follow through weakness will lead to extension of the current decline towards its December low of 34000 in the coming sessions

• The index has support around 34000 levels being the confluence of the following :

• (a) 61 . 8 % retracement of the previous major up move (30405 -41829 ) is placed around 34300 levels

• (b) lower band of the rising channel in place since last one year is placed around 34000 levels

• (c) the December 2021 lows are also placed at 34018 levels

• Among the oscillators the weekly stochastic remain in downtrend and is currently placed at a reading of 28 and is seen approaching the oversold territory

in the coming session, index is likely to open gap up amid pullback in global market . Volatility is likely to remain high on account of the volatile global cues . In today’s session we expect the index witness pullback after recent sharp decline . Hence after a positive opening use dips towards 35310 -35380 for creating long position for target of 35640 , maintain a stop loss at 37190

Nifty Bank Index – Weekly Candlestick Chart

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