IGI Logo

Nifty : 17069

Technical Outlook

• The equity benchmark started the truncated week with a negative gap (17102-16924). However, supportive efforts emerged from the lower band of consolidation placed at 16800 that helped index to recoup most of intraday losses. The daily price action formed a bull candle carrying lower high-low, indicating buying demand at elevated support base

• Key point to highlight over past six sessions is that, on three occasions index bounced from lower band of consolidation coincided with 200 days EMA placed around 16800 despite global volatility, highlighting strong support at 16800. Thus, only a decisive close below 16800 post US Fed meet outcome would lead to extended correction, else prolongation of consolidation in the broader range of 17500-16800 amid stock specific action

• The past four week’s corrective phase hauled weekly stochastic oscillator in oversold conditions (placed at 19). Hence, dips should be capitalised on to accumulate quality stocks in a staggered manner. On the upside, 17500 will be the key level to watch as it is a confluence of: a) bearish gap recorded on April 18, 2022 placed in the range of (17475-17238) b) 50% retracement of April decline (18114-16825)

• Structurally, index has been witnessing slower pace of retracement as over past 18 sessions retraced only 50% of 19 session rally despite elevated global volatility. Going ahead, we expect Nifty to hold 16800 in coming weeks as it is confluence of: A) 50% retracement of the entire March 2022 B) 200 days EMA placed at 16860

• The broader market indices are consolidating in the vicinity of 200 days EMA. We believe, base formation from hereon would set the stage for next leg of up move amid ongoing Q4FY22 earning season

NSE Nifty Daily Candlestick Chart

Nifty Bank: 36163

Technical Outlook​​​​​​​

• The daily price action formed a bull candle as it witnessed buying demand from near the crucial support area of 35500 - 35000 on Monday’s session

• Going ahead, we expect the index to hold above the crucial support area of 35500 -35000 and gradually head towards 37300 levels in the coming weeks

• The index has already taken four weeks to retrace just 50 % of its preceding four weeks up move (32156 -38765 ) . A shallow retracement signals a positive price structure and a higher base formation

• On the higher side 37300 is likely to act as major hurdle being the confluence of the bearish gap area of 18th April & the 50 % retracement of recent decline (38765 -35511 )

• Structurally, the current corrective decline is shaping out as a retracement of strong 20 % rally from March 2022 lows (32156 ) which has helped the index to work off the overbought conditions in the weekly time frame . We expect the index to hold above the strong support area of 35500 -35000 levels as it is confluence of :

• (a) 61 . 8 % retracement of the entire March 2022 up move (32155 -38765 ) placed at 34800 levels

• (b) The rising 52 weeks EMA is also placed around 35500 levels

• (c ) The recent swing low of second half of March 2022 is also placed around 35000 levels

• Among the oscillators the weekly stochastic has cooled off from the overbought territory and is currently placed at a neutral reading of 32 signaling a pullback likely in the coming weeks In the coming session, index is likely to open on a flat note amid mixed global cues . We expect the index to trade in a range with positive bias . Hence use intraday dips towards 35980 -36050 for creating long position for the target of 36290 , maintain a stoploss at 35870

Nifty Bank Index – Weekly Candlestick Chart

To Read Complete Report & Disclaimer Click Here

https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

Above views are of the author and not of the website kindly read disclaimer