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NSE(Nifty): 14930

Technical Outlook

*The daily price action formed a bear candle with long lower shadow, highlighting supportive efforts emerged from elevated support base of 14700 and consequently recouped more than 200 points from days low of 14746

*Going ahead, we expect index to hold Monday’s panic low which is in the vicinity of the key support threshold of 14700 and gradually retest upper band of consolidation placed at 15300 in coming weeks. Therefore, any dip from here on should be capitalized as incremental buying opportunity in quality large caps and midcaps stock

*Our constructive stance on the index is based on following two observations

* A) Key point to highlight since September 2020 is that, on multiple occasions index has respected the key support of upward slopping trend line (as shown in chart) coincided with 50 days EMA and subsequently paved the way for next leg of up move. In current scenario as well Nifty bounced from the aforementioned strong support zone placed around 14700, highlighting inherent strength.

* B) The developed markets have resolved out of past two months consolidation backed by faster pace of retracement on the smaller degree charts, indicating revived upward momentum. We expect, positive correlation to play out in the domestic market as well in coming weeks.

*The broader markets have taken a breather after recent outperformance and currently undergoing healthy consolidation as over past six sessions Nifty midcap and small cap indices 50% to 61.8% of preceding four sessions up move. Slower pace of retracement signifies robust price structure that augurs well for subsequent up move. Thus we expect, broader markets to accelerate relative outperformance in coming weeks

*The broader markets have taken a breather after recent outperformance and currently undergoing healthy consolidation as over past six sessions Nifty midcap and small cap indices 50% to 61.8% of preceding four sessions up move. Slower pace of retracement signifies robust price structure that augurs well for subsequent up move. Thus we expect, broader markets to accelerate relative outperformance in coming weeks

*Structurally, we do not expect index to breach the key support threshold of 14700 as it is confluence of a) The 80% retracement of past two weeks up move (14468-15336), at 14642 b) Past tow week’s low is placed at 14639 In the coming session, follow through strength above Monday’s high (15048) would confirm conclusion of corrective bias and resolve higher. Hence, use intraday dip towards 14910-14942 to create long position for target of 15027

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 35182

Technical Outlook

*The daily price action formed a bullish hammer like candle with a long lower shadow signalling strong buying support at lower levels around 34500 -34000 levels . A follow through strength above Monday’s high (35544 ) would confirm conclusion of corrective bias and resolve higher in the coming sessions

*Going ahead, we expect the index to hold above Monday’s panic low (34430 ) and extend the current pullback towards the upper band of the recent consolidation towards 36500 in the coming weeks.

*The index on Monday’s session rebounded from the major support area of 34500 -34000 levels being the confluence of the following technical observations of : a) The 38 . 2 % retracement of the budget rally (29687 -37708 ) placed at 34645 levels b) The rising 50 days EMA placed at 34080 levels c) the rising trendline support joining lows since September 2020 is also placed around 34300 levels

*The index over the past 19 sessions has retraced just 38 . 2 % of preceding 13 sessions sharp up move (29688 -37708), at 34645 . The slower pace of retracement signifies healthy retracement and a higher base formation for the next leg of up move . Therefore, the current breather should not be seen as negative and should be capitalised on as incremental buying opportunity

*In the coming session, the index is likely to open on a flat to positive note on back of firm global cues . Volatility is expected to remain high on account of the volatile global cues . We expect the index to trade with positive bias after sharp pullback in the second half of previous session . Hence use dips towards 35120 - 35180 for creating intraday long for the target of 35390 , maintain a stoploss at 35010

Nifty Bank Index – Daily Candlestick Chart

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