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Nifty: 15732

Technical Outlook

• The index recouped intraday losses after initial decline, yet failed to surpass previous sessions high. As a result, daily price action formed a small bull candle carrying lower high-low, indicating extended correction. Key point to highlight is that, the index has been witnessing positive divergence as the Nifty has made a lower low against daily RSI which has formed a higher low, indicating impending pullback

• The index has approached key support of 15700 (which has been held on multiple occasions over past three months) ahead of global event of US FOMC meet. Going ahead, holding 15700 post event of FOMC meet would keep pullback option open. Else, prolongation of corrective bias towards 15400 con not be ruled out. Further, for sentiment to revive, index needs to form higher high-low on weekly timeframe along with improvement in market breadth. On the upside, 16200 would act as key hurdle as it is Monday’s gap down area (16202-15878) coincided with 50% retracement of current decline.

• Structurally, the sentiment indicators are approaching their bearish extremes. Historically, such bearish extreme conditions posses distinctive nature of a technical pullback in subsequent weeks. The key observations on sentiment indicators are as follows (detailed charts are shown in next slide) :

• A) Historically, reading of percentage of stock above 200 DMA below 20 signifies oversold conditions and witness decent bounce in subsequent weeks. Therefore, current reading of 17 (which is lowest since March 2020) signifies impending pullback B) Empirically, net advance - decline below -450 signifies market sentiment at its bearish extreme, offers favourable entry points from medium term perspective.

• We believe, strong support for the Nifty is poised at 15400 as it is confluence of: a) 61.8% retracement of CY-21 rally (13596-18604), at 15510 b) Since October 2021, the intermediate correction have not exceeded for more than 14%. In current scenario, 14% correction from April high of 18114 will mature around 15400

• The formation of lower peak and trough on the broader market indices signifies corrective bias. To pause the ongoing corrective bias, the broader market indices need to decisively close above previous session high. Else prolonged correction wherein broader market would relatively underperform the benchmark

• In the coming session, index is likely to open on a flat note tracking mixed global cues ahead of US FOMC meet. Index in the last two sessions is seen taking support around the March low (15671). Hence, use intraday dips towards 15672-15702 for creating long position for the target of 15789.

Nifty Bank: 33311

Technical Outlook

• The daily price action formed a high wave candle which maintained lower high -low signaling continuation of the corrective bias .

• Index is currently placed around the crucial support area of 33000 , holding above the same will lead to base formation in the range of 33000 -34500 . Failure to do so will lead to an extended decline towards March 2022 low of 32100 levels .

• Index has immediate hurdle at 34500 levels being the confluence of the Monday’s gap down area (33774 -34345 ) and the 50 % retracement of the recent decline (36083 - 33123 )

• Going ahead, index need to start forming higher high -low in the daily chart on a sustained basis for any technical pullback to materialize in the coming sessions • The index has key support around 33000 levels being the confluence of the following technical observations : • (a) The value of the rising trendline joining the lows of April 2021 (30405 ) and March 2022 (32155 ) placed around 33000 levels

• (b) The previous major low of May is also placed around 33000 levels

• Among the oscillators the daily stochastic has approached oversold territory with a reading of 10 , signaling supportive effort is likely around the support area of 33000 . In the coming session, index is likely to open on a flat note amid mixed global cues . Index is expected to trade choppy ahead of the key US FOMC meet holding above the support area of 33000 . Hence use intraday dips towards 33110 -33190 for creating long position for the target of 33430 , maintain a stoploss at 32990.

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