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NSE (Nifty): 17362

Technical Outlook

* The index staged a smart recovery of 149 points from early lows of 14287, to record new high of 17436. However, it failed to sustain near highs and then traded lacklustre in the second half. Profit booking in recently run up stocks was in line with expectations as the index entered overbought trajectory after sharp run up over pastfew sessions

* Sectoral churn and participation of multiple sectors in rotation is a sign of healthy uptrend. Hence, we maintain our positive stance and expect the Nifty to gradually head towards our revised target of 17600 in September 2021 as it is the price parity of July-August rally (15515-16700), projected from midAugust low of 16376. After 1000 points gain in 11 sessions, bouts of volatility at higher levels should not be construed negatively. Hence, we recommend sticking to a buy on decline strategy in current truncated week to accumulate quality stocks as over past15 months such strategy has worked well

* Sectorally, BFSI, capital goods, consumption, and telecom to outperform while metal & auto sectors provide favourable riskreward at current juncture

* Broader market indices are expected to continue their resilience and had higher after couple of days breather. We expect Nifty small cap index to catch up after strong base formation at50 DEMA, as it is just 1% away from lifetime highs

* Structurally, as per classic Dow Theory, the formation of higher high and low, signifies continuance of positive bias which makes us confident to revise support base upward at 16900, as it is 50% retracement of current up move (16376 - 17340)

In the coming session, the index is likely to open on a flat to positive note amid firm Asian cues. We expect it to trade in a range with positive bias while sustaining above 17300 levels. Hence use intraday dips towards 17320-17350 to create long for target of 17437.

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 36468

Technical Outlook

* The daily price action formed a high wave candle with a long lower shadow signaling support at lower levels around 36000 levels .

* Key observation is that the index since April 2021 has not corrected for more than three to four consecutive sessions, with three sessions of decline already behind us, we expect the index to maintain the rhythm and rebound in the coming couple of sessions

* The overall structure in the index remainpositive and we expect the index to maintain positive bias and gradually head towards 37700 levels in the coming weeks as it is the confluence of the measuring implication of the recent range breakout (36300 - 34800 ) and the previous all -time highof February 2021

* Buying on declines strategy has worked well over past 15 months . Hence, the current breather offer incremental buying opportunity inquality banking stocks

* The index is seen forming higher high -low in the larger degree chart, which gives up confident to revise the support base higher towards | 35300 -35500 levels as it is the confluence of the following technical observations

* 80 % retracement of the current up move (34817 -37140 ) placed around 35300 levels

* rising 50 daysEMA also placed around 35540 levels

* the value of the rising trend line joining the previous lows is also placed around 35400 levels

* In the coming session, index is likely to open on a flat to positive note amid firm Asian cues . We expect the index to consolidate with positive bias while sustaining above previous session low (36251 ) . Hence, use intraday dips towards 36290- 36350 for creating long position for target of 36610 , maintain a stoplossof 36170

Nifty Bank Index – Daily Candlestick Chart

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