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NSE (Nifty): 15208

Technical Outlook

* The daily price action formed a small bear candle carrying higher high-low, indicating continuance of positive bias amid stock specific action

* Going ahead, we reiterate our positive stance on the market and expect Nifty to challenge lifetime high of 15400 in coming sessions. Key point to highlight in the current up move off May low (14416) is that, the secondary corrections have been shallower in nature, highlighting elevated buying demand. In the process, market breadth has improved as ~80% components of Nifty 500 index are trading above 50 days EMA compared to April reading of 60%, that augurs well for durability of ongoing up trend. The rejuvenation of uptrend makes us confident to revise our target to 15700 for the month of June 2021, as it is 123.6% external retracement of Feb-April Correction (15432-14151). Hence, round of volatility owing to F&O expiry week should be capitalised as incremental buying opportunity in quality large cap and midcaps

* The Nifty midcap and small cap indices continued to log fresh 52 weeks high. Key point to highlight is that the outperformance in the broader market indices has been backed by improving market breadth as currently ~83% of index components are trading above their 50 days EMA compared to April reading of ~60%. We expect, broader market to accelerate their relative outperformance wherein catch up activity would be seen in small cap index, as Nifty Midcap index is placed at all time high whereas small cap index is still 5% away from lifetime highs

* Structurally, we believe any dip from hereon would get anchored around 14600 as index has formed a higher base formation at 14600 despite escalating concern over 2 nd wave of Covid-19. Thus, we believe strong support is placed at 14600 as it is confluence of:

* a) 80% retracement of current up move (14416-15294), at 14592

* b) past three week’s low at 14592

* In the coming session, we expect volatility to remain high ahead of the May series expiry session. We believe, stock specific action would prevail amid positive bias. Hence, use intraday dip towards 15170- 15195 to create long for target of 15283.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 34662

Technical Outlook

* The daily price action formed a bear candle signalling profit booking near the 35000 levels . We expect the index to hold above the recent breakout area and the April high (34287 ) and resume its up trend in the coming sessions

* As mentioned in earlier edition the index has recently registered a breakout above the falling supply line joining major highs of the last three months as can be seen in the adjacent chart indicating strength and resumption of the up move .

* We expect the index to maintain positive bias and head towards 36200 levels in the coming month as it is the confluence of the 80 % retracement of the entire last three months corrective decline (37708 -30405 ) and the price parity with previous up move (30405 -34287 ) as projected from the recent trough of 32115 signalling upside towards 36200 levels

* Index in the smaller time frame has witnessed a faster retracement of the last falling segment as 11 session’s decline (34287-32115) was completely retraced in just five sessions. A faster retracement in less than half the time interval signals a robust price structure

* The formation of higher high -low on the weekly chart signifies elevated buying demand that makes us assured to revise the support base higher towards 33000 levels as it is confluence of the 61 . 8 % retracement of the current up move (32115 -35216 ) and the rising 50 days EMA is also placed at 33230 levels

* Among the oscillators, the daily stochastic remain in uptrend and is currently placed at a reading of 80 thus supports the continuation of the positive bias in the index in the coming sessions

* In the coming session, the index is likely to open on a flat note amid muted global cues . We expect the index to trade with positive bias with sustaining above previous session low (34434). Hence use dips towards 34460-34520 for creating long position for the target of 34770 , maintain a stoploss of 34340

Nifty Bank Index – Daily Candlestick Chart

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