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Nifty :16955

Technical Outlook

* The index started the session on a positive note and inched northward during the session. As a result, daily price action formed a bull candle carrying higher high-low, indicating continuance of positive bias

* Key point to highlight is that, the Nifty has settled above previous session high 16936 (on a closing basis) and filled Monday’s negative gap (16966-16840), indicating abating downward momentum. Going ahead, we expect index to resolve higher and extend the ongoing pullback in tandem with global peers towards 17200. However, the northbound journey from hereon will be in a zigzag manner. Hence any dip from here on should be capitalised to accumulate quality stocks in a staggered manner. We believe, 17200 will be the key level to watch on the upside as it is confluence of:

* a) 61.8% retracement of last leg of decline (17640-16410), at 17170

* b) 100 days EMA is placed at 17150

* The broader market indices are undergoing slower pace of retracement as over past nine weeks Nifty midcap, small cap indices have retraced 61.8% of preceding eight week’s rally. Slower pace of retracement signifies healthy retracement that would set the stage for next leg of up move

* We believe the ongoing corrective phase would find its feet around 16400 as it is confluence of:

* a) Monday’s panic low is placed at 16410

* b) 80% retracement of current pullback (16410-16971) is placed around 16500

In the coming session, the index is likely to open on a positive note tracking buoyant global cues. We expect index to trade with a positive bias amid elevated volatility owing to weekly derivative expiry. Hence use dip towards 16988-17010 for creating long position for target of 17098

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 35029

Technical Outlook

* The daily price action formed a bull candle which mostly remained contained inside previous session price range signaling a breather for the second consecutive session after recent sharp decline .

* Index need to start forming higher high -low in the daily chart on a sustained basis and close above Monday’s gap down area of 35500 for any meaningful pullback to materialize . Failure to do so will lead to a range bound trade in the broad range of 34000 -35500

* Index after the recent sharp decline of 3500 points in the preceding six sessions has approached oversold territory and is placed around the price parity with the previous three major decline of around 20 % each in the last 20 months placed around 33500 levels .

* On the higher side immediate resistance is placed at 35500 levels being the confluence of the 200 days EMA (placed at 35470 ) and the upper band of the Monday’s gap down area

* Structurally, time wise index has maintained rhythm over past 20 months of not correcting for more than 9 weeks’ . In the current scenario we are already in the 9 weeks of correction . we expect ongoing corrective phase to mature in coming weeks as Index has approached oversold territory in the daily and weekly chart 

* Among the oscillators the daily stochastic has approached oversold territory and is placed at the reading of 19

* In the coming session, index is likely to open on a positive note amid firm global cues . We expect, the index to continue with its last two sessions pullback and test the Monday’s gap down area placed around 35500 levels . Hence after a positive opening use dips towards 35070 -35150 for creating long position for the target of 35390 , maintain a stoploss at 34970.

Nifty Bank Index – Weekly Candlestick Chart

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