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Nifty

• The index extended its choppy trading session over a fourth consecutive session wherein it oscillated in 100 points range. The daily price action formed a Doji candle carrying higher high, indicating continuance of a positive bias amid elevated volatility

• We reiterate our positive stance and expect the Nifty to challenge the all-time high of 18600 in the coming sessions and gradually head towards 18900 by December 2022. In the process, bouts of volatility owing to global development would offer fresh entry opportunity. Thus, a temporary breather from here on should be capitalised on as incremental buying opportunity as we do not expect the index to breach the key support of 17800. Our positive stance on the market is based on following observations:

• a) the Nifty has given a resolute breakout from 13 month consolidation phase indicating end of corrective phase and beginning of structural uptrend

• b) US$, INR pair has reversed from its key resistance around 83 mark on expected lines, supported by similar sharp reversal in US dollar index from multi year trend line resistance. Sequential lower high-low formation in US$, INR pair to favour inflows in Indian equities

• c) India VIX has breached six month’s low and hovering around reading of 15 indicating low risk perception from market participants

• d) global equity indices made sharp bullish reversal last week. Dow Jones industrial average has given a breakout from 11-month long declining channel indicating end of corrective phase and expected to pose a technical pullback thereby supporting overall bullish sentiment

• Structurally, the formation of higher peak and trough signifies elevated buying demand that makes us confident to retain support base at 17800 as it is 38.2% retracement of past four week’s rally 16950-18442

• The broader market indices are forming a higher base above 52 weeks EMA. We expect, Nifty midcap, small cap indices to accelerate upward momentum and witness catch up activity against the Nifty

• In the coming session, index is likely open on a subdued note tracking muted global cues. We expect index to trade with a positive bias amid elevated volatility owing to weekly expiry. Thus, intraday dip towards 18368-18392 should be used to create intraday long positions for target of 18484

Nifty Bank

• The daily price action formed a small bull candle with a higher high -low and a fresh all time high (42611 ) signalling continuation of the positive momentum

• The index is seen extending its up move after recently generating a breakout above the last eight weeks range (41840 -37387 ) signaling strength . Going forward, we expect the index to gradually head towards 43500 levels in the coming weeks being the 138 . 2 % external retracement of the recent breather (41840 -37386 ) . Hence, any dips should be used as an incremental buying opportunity in quality banking stocks

• Structurally, in the Bank Nifty rallies are getting faster and stronger while corrections are shallow, underpinning inherent strength . It has recently generated a faster retracement on higher degree as eight month’s decline (41829-32990) was completely retraced in just two and half months highlighting robust price structure

• The Bank Nifty has support at 40700 mark being the confluence of the (a) 38 . 2 % retracement of the last seven weeks up move (37387 -42611 ) placed at 42700 (b) the 10 weeks EMA currently placed at 42690 levels

• Among the oscillators the weekly MACD remain in strong up trend and is seen sustaining above its nine periods average thus validates positive bias

• In the coming session, index is likely to open on a flat to negative note amid soft global cues . We expect the index to consolidate its recent gains with positive bias amid weekly expiry . Hence use intraday dips towards 42360 -42440 for creating long position for the target of 42690 with a stoploss at 42240

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