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NSE (Nifty): 15824

Technical Outlook

* The daily price action formed an inside bar as index oscillated within Friday’s trading range (15900-15768), indicating lacklustre movement amid stock specific action

* The lack of faster retracement on either direction signifies prolonged consolidation in the broader range of 15950-15500. Key point to highlight over past four weeks is that, on multiple occasions elevated buying demand emerged from 15600 mark, highlighting strong support base at 15600 levels. Thus, any dip from hereon should be capitalised on to accumulate quality stocks amid progression of Q1FY22 earning season. We believe, a decisive close above upper band of consolidation 15950 backed by firm global cues and multi sector participation would open the door for next leg of up move towards our revised target of 16300 in coming month, as it is confluence of:

* a) implied target of recent consolidation (15900-15500) breakout is placed at 16300

* b) 138.2% extension of mid-June rally (15450-15915), projected from July low of 15633, placed at 16284

* The broader market indices relatively outperformed the benchmark as Nifty midcap remained unchanged while small cap gained 0.3% compared to Nifty down 0.2%. We believe, temporary breather from hereon would help broader market to cool off the overbought condition after past four weeks sharp up move and form a higher base that would pave the way for next leg of up move

* Structurally, the persistent buying demand from key support zone of 15600-15500 signifies strong base formation, which we expect to hold going forward, as it is confluence of:

* a) 80% retracement of June-July rally (15450-15962), at 15500

* b) 10 weeks EMA placed at 15600

In the coming session, the index is likely to open on appositive note tracking firm global cues. We expect index to trade with positive bias while sustaining above Friday’s low (15768). Hence use intraday dips towards 15790-15815 to create long for target of 15905.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 34949

Technical Outlook

* he daily price action formed a Doji candle with a higher high - low signalling consolidation around the 35000 levels with positive bias after Friday’s sharp up move .

* Going ahead, we expect the index to continue with its last seven weeks consolidation in the broad range of 34000 -35800 . Lack of faster retracement in either direction signals continuation of the current consolidation .

* Key point to highlight during ongoing consolidation is that the index has managed to hold 34000 -34500 mark on multiple occasions, highlighting strong support base, which we do not foresee to breach

* The index has witnessed a shallow retracement as it has retraced just 50 % of its May rally (32115 -35810 ) over past seven weeks highlighting strength and a higher base formation

* We advise to capitalize the current breather as an incremental buying opportunity in quality large and mid -cap banks as the overall structure remains positive 

* The index has support base at 34000 levels being the confluence of the following technical observations

* (a) The lower band of the last seven weeks’ consolidation range placed around 34000 levels

* (b) The rising 100 days EMA is also placed at 34000 levels

* Among the oscillators the daily stochastic has rebounded from the oversold territory and has generated a buy signal thus supports the positive bias in the index

* 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 with positive bias while maintaining higher high -low . Hence use intraday dips towards 34850 -34920 , for creating long position for target of 35140 , maintain a stoploss of 34740

Nifty Bank Index – Daily Candlestick Chart

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