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Nifty : 17207

Technical Outlook

• The index staged a strong comeback after an initial decline but failed to sustain at higher levels. As a result, daily price action formed a high wave candle carrying small real body with shadows on either side, highlighting elevated volatility amid escalating geopolitical concerns.

• The escalated geopolitical issues have led to spike in crude oil prices which would trigger elevated volatility in the equity market. In the process, we expect strong support for the Nifty is placed around January low of 16800 which has been held on four occasions over past two months despite elevated global volatility. Therefore, only a decisive close below 16800 would lead to further acceleration of decline towards 16400-16300 as it is confluence of: a) December 2021 lows of 16410 b) Equality of current down leg from February high of 17794, with mid January decline (18350-16836), at 16300

• On the higher side 17500-17600 is expected to act as immediate key resistance. In the ongoing corrective move (since mid-January 2022) the index has failed to sustain above previous week’s high. Therefore, a decisive close above last week’s high (17490) would be required for extension of pull back to materialize. Key hurdle is placed at 17500 which is marked by : a) 80% retracement of early February decline (17794-16809), placed at 17600 b) Last week’s high is placed at 17490

• Key point to highlight in the broader market is that, past two months correction hauled Nifty midcap and small cap indices in the vicinity of 52 weeks EMA for the first time since June 2020. Historically, 52 weeks EMA act as key support for the broader market. Therefore, only a breach below 52 weeks EMA on a closing basis would lead to extended correction

• Structurally, over past five weeks’ index has retraced 80% of the preceding four weeks rally (16410-18350). Slower pace of retracement signifies that the broader bullish structure is still intact. Thus, we do not expect Nifty to breach key support of 16800, as it corroborates with: a) 80% retracement of December-January rally (16410-18350), placed at 16798 b) Panic low recorded in January 2022 is placed at 16836 c) 200 days EMA is placed at 16712 In the coming session, index is likely to open gap down amid weak global cues. Volatility is likely to remain high on account of escalating geopolitical issues. We expect index to trade with corrective bias. Thus, use intraday pullback towards 17090-17120 for creating short position for target of 17007

NSE Nifty Daily Candlestick Chart

Nifty Bank: 37685

Technical Outlook​​​​​​​

• The daily price action formed a small bull candle with shadows on either side, indicating consolidation amid higher volatility

• Bank Nifty index has been trading in a broad range of 39400 and 36500 over past five weeks now within which it has failed to generate faster retracement on either sides indicating extended consolidation over next few sessions and higher base formation around 36500 levels

• Structurally ongoing consolidation would help index workout of overbought trajectory and set the stage for next leg of up move towards 39400 levels . Therefore, any dip should not be construed as negative rather would present an incremental buying opportunity

• The index has support around 36500 levels being the confluence of the following technical observations :

• (a) 200 days EMA currently placed at 36210

• (b) 50% retracement of the previous major up move (34018-39424) is placed around 36700 levels

• (c) the lower band of the last five weeks’ range is also placed around 36500 levels

• Among the oscillators the weekly stochastic is seen cooling off from the overbought territory and is currently placed at a reading of 51 signaling continuation of the current consolidation in the coming sessions In the coming session, index is likely to open gap down amid weak global cues . Volatility is likely to remain high on account of escalating geopolitical issues . We expect index to trade with corrective bias . Hence after a gap down opening use intraday pullback towards 37280 -37340 for creating short position for target of 37020 , maintain a stop loss at 37460

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