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NSE (Nifty): 16364

Technical Outlook

* The index started Thursday’s session on a positive note and inched northward throughout the session as intraday pullbacks were short lived. In the process, Nifty scaled to fresh all time high of 16375. The daily prices action formed a bull candle carrying higher highlow, indicating acceleration of upward momentum

* Going ahead, we expect index to extend the ongoing upward momentum and gradually head towards our earmarked target of 16600 in coming weeks. The multi sector participation backed by improving market breadth signifies rejuvenation of upward momentum after past five sessions shallow retracement wherein index retraced preceding six session gains by just 23%. Meanwhile, Bank Nifty is also undergoing slower pace of retracement, highlighting healthy consolidation. We believe, the revived traction in banking along with IT, Telecom and metals (which represent over 50% weightage in Nifty) would drive Nifty towards 16600 as it is 138.2% extension of mid June rally (15450-15915) projected from June high of 15915 is placed at 16575

* In line with our view, Nifty midcap and small cap indices maintained the rhythm of sustaining above 50 days EMA since June-20 as both indices arrested ongoing corrective phase near 50 days EMA after correcting 6% & 8% respectively from their all time high levels. Both indices have closed above previous day’s high after 7 sessions decline, indicating pause in downward momentum. We expect, broader market indices to undergo base formation that would set the stage for next leg of up move

* Structurally, index has maintained the higher peak and trough formation on the larger degree chart, indicating positive bias which makes us confident to retain support base at 15900, as it is confluence of:

* a) 50% retracement of July-August rally (15513-16349), at 15930

 b) as per change of polarity concept earlier resistance of 15900 would now act as key support

In the coming session, we expect index to resolve higher while maintaining a higher high-low formation. Hence use intraday dips towards 16310-16335 to create long for target of 16423.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35937

Technical Outlook

* The daily price action formed a small bull candle which remained contained inside previous session price range signalling continuation of the narrow range bound trade for the last six sessions signalling a higher base formation for the next leg of up move after the recent eight weeks’ consolidation breakout (35800 -34000 ) highlighting strength

* Going ahead, we expect the index to maintain positive bias and gradually head towards the 36600 levels in the coming weeks being the confluence of the previous major high of March 2021 and the 138 . 2 % external retracement of the current breather (35810 -33908 )

* The index is also seen sustaining above the recent falling supply line breakout area joining highs of February 2021 (37708) and July 2021 (35978) signalling positive bias

* Index in the last six sessions has retraced just 38 . 2 % of its previous three sessions up move (34588 -36219 ) . A shallow retracement post a sharp up move highlights a higher base formation and a robust price structure 

* Structurally , the formation of higher peak and trough on the larger degree chart makes us confident to revise support base upward at 34500 as it is confluence of :

* (a) 80 % retracement of the current up move (34115 -36317 ) placed around 34500

* (b) rising 100 days EMA placed around 34336 levels

* (c) The last week low is also placed at 34588 levels

* In the coming session, index is likely to open on a flat to positive note amid muted global cues . We expect the index to trade in a range with positive bias while holding above Wednesday low (35670 ) . Hence, use intraday dips towards 35800 -35860 , for creating long position for target of 36090 ,maintain a stoploss of 35680

Nifty Bank Index – Daily Candlestick Chart

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