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NSE (Nifty): 16637

Technical Outlook

* The index witnessed a lacklustre movement as the Nifty primarily oscillated in 80 points range throughout the session. As a result, daily price action formed a high wave candle, indicating elevated volatility amid stock specific action. In the process, broader markets relatively outperformed over third consecutive session

* The formation of higher high-low on the weekly chart backed by sectoral rotation indicates inherent strength. This makes us confident to reiterate our constructive stance on index and expect the Nifty to gradually head towards our earmarked target of 16900 in coming weeks. Over the past 15 months, buying on decline strategy has worked well as intermediate correction is a part of the bull market. We believe sticking to the same strategy would be productive as temporary breather after ~8% rally over past four weeks would present incremental buying opportunity to ride move toward 16900 in coming weeks being 161.8% extension of midJune rally (15450-15962) projected from July high of 15962

* The broader market indices maintained the rhythm of maturity of price/time wise correction as Nifty midcap and small cap extended pullback over third consecutive session after finding support in the vicinity of 50 days EMA. Since March 2020, broader market indices have not corrected for more than 10% and not more than three consecutive weeks. In the current scenario, over past two weeks both indices have corrected 6% and 10% from their lifetime highs. The supportive efforts in the vicinity of 50 days EMA make us believe the broader market indices would undergo base formation that would pave the way for next leg of up move

* Structurally, the formation of higher peak and trough on the larger degree chart makes us confident to retain support base upward at 16100, as it is confluence of:

* (a) positive gap recorded on August 4 (16131-16176)

* (b) 10 week’s EMA is placed at 16110

* (c) past two week’s low is placed at 16162

In the coming session, the index is likely to open on a positive note amid firm Asian cues. We expect index to trade with a positive bias while sustaining above 16550 mark. Hence use intraday dips towards 16590- 16622 to create long for target of 16705.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35617

Technical Outlook

* The daily price action formed a small bull candle which mostly remained contained inside Tuesday long bull candle signaling consolidation for a second consecutive session after Tuesday strong up move .

* Going ahead, we expect the index to maintain positive biass and head towards the upper band of the recent consolidation placed around 36300 levels in the coming sessions

* We believe the overall structure remain positive and any corrective dips on account of the volatile global cues will provide fresh entry opportunity in quality banking stocks

* In the last 15 sessions the index has retraced just 61 . 8 % of its previous five sessions up move (34115 -36219 ) . A shallow retracement highlights a higher base formation and a positive price structure

* The index has immediate support base at 34500 levels as it is confluence of :

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

* (b) rising 100 days EMA placed around 34545 levels

* Among the oscillators, the daily stochastic has recently rebounded from the oversold territory and has generated a buy signal moving above its three periods average thus validates positive bias

* In the coming session, index is likely to open on a flat to positive note amid muted global cues . Volatility is likely to be high on account of the volatile global cues . We expect the index to trade in a range with positive bias while holding above 35400 levels . Hence use intraday dips towards 35430 — 35490 for creating long position for target of 35760 , maintain a stoploss of 35310

Nifty Bank Index – Daily Candlestick Chart

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