IGI Logo

Nifty: 17470

Technical Outlook

* The Nifty witnessed a gap up opening (17250-17310) and continued to march northward backed by across sector participation as intraday dips remained short lived. The daily price action formed a sizable bull candle carrying higher high-low, indicating acceleration of upward momentum. As a result, index approached the upper band of consolidation placed at 17500

* The index has undergone a healthy base formation over past few sessions and held the lows of 16800 on expected lines. Recent base formation gives us confidence that time wise correction is also nearing maturity, we therefore expect index to resolve above 17500 levels and gradually head towards psychological mark of 18000 in coming weeks. Hence, one should focus on building quality portfolios and any intermediate dips to be capitalized as incremental buying opportunity. Our constructive stance is based on following key evidences:

* A) past two sessions sharp up move (~600 points) helped index to resolve out of upper end of Andrew’s Pitchfork (drawn adjoining subsequent swing points off October highs of 18600), indicating conclusion of ongoing corrective phase and acceleration of momentum B) Current rally from last week low (16782-17489=707 points is now bigger than early November pull back (17613- 18210=597 points) indicating structural improvement C) Historically, any bull market correction to the tune of 10-15% get arrested when the percentage of Nifty500 stocks above 200 days EMA approaches around 50 to 60%. In ongoing corrective phase this count has approached 60% suggesting markets approaching sentiment low. Historically buying at such sentiment readings has been rewarding for investors

* Our projection of target of 18000 is confluence of:

* A) 61.8% retracement of entire decline since October high (18600- 16782) is placed at 16900 B) Implicated target of past two weeks consolidation (17500-16900) is placed around 18000

* The Nifty midcap and small cap indices resolved out of their base formation and closed above 50 days EMA, indicating rejuvenation of upward momentum that augurs well for structural uptrend in coming weeks. Therefore, focus should be on accumulating quality stocks to ride structural uptrend

In the coming session, the index is likely to open on a positive note tracking firm global cues. We expect index to trade with a positive bias amid elevated volatility owing to weekly expiry. Hence use dips towards 17490-17515 for creating long position for target of 17598.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 37284

Technical Outlook

* The daily price action formed a bull candle which maintained higher high -low signaling continuation of the up move for a second consecutive session as the index in the process witnessed a breakout above the last two weeks range 37000 -25300 signaling rebound after a healthy base formation around the 200 days EMA

* Index on Wednesday session has closed above the immediate hurdle of 37100 indicating extended pullback towards the 50 % retracement of the entire decline (41829 - 35328 ) placed at 38500 levels which also coincides with the previous breakdown area

* Nifty Bank has immediate support at 35300 levels being the confluence of the 200 days EMA and the 80 % retracement of the August -October 2021 rally (34115 -41829 )

* The index maintained the rhythm of rebounding after 6 - 8 weeks of corrective phase as seen since April 2020 signaling continuation of the overall positive structure

* Among the oscillators the daily stochastic is rebounding taking support at its three periods average and is currently placed at a reading of 63 thus supports the continuation of the last two sessions pullback in the coming sessions

* In the coming session, index is likely to open on a positive note amid firm global cues . We expect the index to maintain higher high -low and trade with positive bias . Hence after a firm opening use intraday dips towards 37350 -37430 for creating long position for the target of 37690 , maintain a stoploss at 37240.

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