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Nifty: (17925)

Technical Outlook

* The index witnessed a gap down opening and initially inched southward. However, supportive efforts from 38.2% retracement of past four session’s sharp up move (17146-17944) placed around 17650, helped index to recoup 130 points from day’s low. As a result, daily price action formed a small bear candle with lower shadow, indicating breather after recent sharp up move. In the process, stock specific action prevailed as broader market relatively outperformed

* We believe the ongoing breather after past two weeks 1530 points rally will help daily stochastic oscillator to cool off overbought conditions (currently placed at 89) and make market healthy. Thus, any dip from here on should not be construed as negative instead dips should be capitalised on as an incremental buying opportunity to ride up move towards 18200 in coming weeks as it is based on following observations:

* a) 80% retracement of entire decline since October 2021 (18604- 16410) is placed at 18165

* b) November 2021 high is placed at 18210

* Key point to highlight in broader market is that, despite gap down opening, Nifty midcap and small cap indices recouped intraday losses and closed the session at day’s high, highlighting inherent strength. Both the indices are sustaining above three months falling channel breakout area, indicating robust price structure which makes us believe that broader market would endure its relative outperformance in coming weeks

* Structurally, the formation of higher high-low on the weekly chart signifies positive bias is intact, that makes us confident to maintain support base in the range of 17400-17500 as it is :

* A) 61.8% retracement of current up move (17146-17944)

* B) current week’s low is placed at17383

In the coming session, the index is likely to open on a flat note amid mixed global cues. We expect buying demand to emerge around 17700 levels, hence use intraday dips towards 17710-17742 for creating long position for the target of 17827.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 37490

Technical Outlook

* The daily price action formed a high wave candle which remained contained inside previous session price range signaling consolidation after last two weeks strong up move of more than 3500 points .

* The recent up move has lead to the daily stochastic oscillator at the overbought territory with a reading of 92 , indicating couple of days breather can not be ruled out . However, such a breather should not be construed as negative instead dips should be capitalised as incremental buying opportunity for up move towards 38800 levels in the coming weeks as it is the 61 . 8 % retracement of the entire decline (41829 -34018 ) .

* The index has completely retraced its 10 sessions decline (37581-34018) in just eight sessions and the current up move in Bank Nifty of more than 3500 points is largest in the entire decline of the last two months signaling strength

* The index has crucial support placed around 36000 levels being the confluence of :

* (a) the rising 200 days SMA placed at 35750

* (b) The upper band of the recent falling channel breakout area is also placed around 36000 levels

* (b) the 50 % retracement of the current up move (34018 - 37862 ) is also placed around 36000 levels

* In the coming session, index is likely to open on a flat note amid mixed global cues . We expect buying demand to emerge around 37400 levels . Hence after flat opening use intraday dips towards 37370 -37430 for creating long position for the target of 37690 , maintain a stoploss of 37240.

Nifty Bank Index – Daily Candlestick Chart

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