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Nifty: 17535

Technical Outlook

• The index witnessed a choppy session ahead of US inflation data as the Nifty oscillated in just 120 points range throughout the session. As a result, daily price action formed a small bear candle carrying higher higher-low, indicating continuance of positive bias amid stock specific action.

• Formation of higher high-low signifies persistence of positive momentum. We expect the cool off in global inflation to boost market sentiment that makes us reiterate our constructive stance and expect the Nifty to head towards 17900 in coming sessions as it is 80% retracement of entire decline off October 2021 to June low (18600-15200). In the process, the bouts of volatility owing to global cues cannot be ruled out. Thus, any temporary breather from here on should not be construed as negative. Instead dips should be capitalised on as buying opportunity. Our constructive bias is based on following key observations:

• a) the breakdown in Brent crude oil prices below $98 boosts sentiment and should help to tone down inflation worries, which is positive for equities

• B) market breadth as measured by percentage of stocks rising above 50 day average has seen remarkable improvement, with current reading of 82% against mid-July reading of 44% indicating broadening participation across sectors and market caps

• c) within emerging market space Indian equities have relatively outperformed MSCI EM basket significantly. With FII turning net buyers in Indian equities over past couple of weeks, we expect this outperformance to get further enhanced

• Structurally, the formation of higher high-low underpinned by broader market participation makes us confident to revise support base at 17100 as it is 38.2% retracement of most recent rally (16438- 17566) coincided with the last week’s low of 17155

• The boarder market indices have been mirroring benchmark move supported by improving market breadth, indicating broad based nature of rally. Going ahead, we expect catch up activity should be seen in small cap space as it is still trading below its 200 days EMA

• In the coming session, index is likely to open gap up amid strong global cues. We expect index to trade with positive bias while maintaining higher high-low amid boost in global risk appetite and weekly expiry. Hence, after a positive opening use intraday dips towards 17680-17712 for creating long position for the target of 17798

NSE Nifty Weekly Candlestick Chart

Nifty Bank: 38237

• The index witnessed a choppy session ahead of US inflation data as the Nifty oscillated in just 120 points range throughout the session. As a result, daily price action formed a small bear candle carrying higher higher-low, indicating continuance of positive bias amid stock specific action.

• Formation of higher high-low signifies persistence of positive momentum. We expect the cool off in global inflation to boost market sentiment that makes us reiterate our constructive stance and expect the Nifty to head towards 17900 in coming sessions as it is 80% retracement of entire decline off October 2021 to June low (18600-15200). In the process, the bouts of volatility owing to global cues cannot be ruled out. Thus, any temporary breather from here on should not be construed as negative. Instead dips should be capitalised on as buying opportunity. Our constructive bias is based on following key observations:

• a) the breakdown in Brent crude oil prices below $98 boosts sentiment and should help to tone down inflation worries, which is positive for equities

• B) market breadth as measured by percentage of stocks rising above 50 day average has seen remarkable improvement, with current reading of 82% against mid-July reading of 44% indicating broadening participation across sectors and market caps

• c) within emerging market space Indian equities have relatively outperformed MSCI EM basket significantly. With FII turning net buyers in Indian equities over past couple of weeks, we expect this outperformance to get further enhanced

• Structurally, the formation of higher high-low underpinned by broader market participation makes us confident to revise support base at 17100 as it is 38.2% retracement of most recent rally (16438- 17566) coincided with the last week’s low of 17155

• The boarder market indices have been mirroring benchmark move supported by improving market breadth, indicating broad based nature of rally. Going ahead, we expect catch up activity should be seen in small cap space as it is still trading below its 200 days EMA

• In the coming session, index is likely to open gap up amid strong global cues. We expect index to trade with positive bias while maintaining higher high-low amid boost in global risk appetite and weekly expiry. Hence, after a positive opening use intraday dips towards 17680-17712 for creating long position for the target of 17798

Nifty Bank Index – Daily Candlestick Chart

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