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NSE (Nifty): 16614

Technical Outlook

* The index witnessed a lacklustre movement throughout the day. However, buying demand at the fag end helped the index to record a fresh all-time high of 16628. As a result, on expected lines, the Nifty surpassed our earmarked target of 16600. The daily price action formed a bull candle with small lower shadows, highlighting elevated buying demand

* The formation of higher peak and trough backed by rejuvenated traction in IT pack signifies inherent strength that augurs well for extension of up move towards our revised target of 16900 in coming month as it is 161.8% extension of mid-June rally (15450- 15962) projected from July high of 15962. Key point to highlight is that the recently underperforming sectors like auto and cements have seen supportive efforts as buying demand emerged from oversold territory. In the process, bouts of volatility at higher levels after recent strong run up can not be ruled out. However, such a breather should be capitalised as an incremental buying opportunity

* The Nifty midcap and small cap indices extended breather. However, we expect both indices to maintain the rhythm of not correcting for more than 10% while sustaining above 50 days EMA, since June 2020. In current scenario as well, both indices arrested ongoing corrective phase near 50 days EMA after correcting 6% & 8%, respectively from their all time highs. We expect, broader market indices to undergo base formation above 50 days EMA that would set the stage for next leg of up move

* Structurally, The formation of higher peak and trough on the larger degree chart makes us confident to revise support base upward at 16100, as it is confluence of :a) Positive gap recorded on August 4 (16131-16176) b) Last 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 positive bias. However, volatility would remain high owing to weekly expiry session. Hence use intraday dips towards 16570-16705 to create long for target of 16687

NSE Nifty Daily Candlestick Chart

Nifty Bank: 35867

Technical Outlook

* The daily price action formed a hammer like candle with a small real body and long lower shadow signalling buying demand around 35600 levels . The index in the last nine sessions is seen forming a higher base above the recent eight weeks’ consolidation breakout area which also coincides with the falling supply line breakout area joining highs since February 2021 (placed at 35600 levels) highlighting strength

* Going ahead, we expect the index to maintain positive bias and gradually head towards the all -time high of 37700 levels in the coming month as it is the measuring implication of the recent range breakout (35800 -34000 ) . In the ongoing truncated week, we expect index to head towards our earmarked target of 36600

* In the last nine sessions the index has retraced less than 38 . 2 % of its previous five sessions up move (34115 -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 35000 as it is confluence of :

* (a) 61 . 8 % retracement of the current up move (34115 -36317 ) placed around 35000 levels

* (b) rising 50 days EMA placed around 35177 levels

* (c) The bullish gap area 4th August 2021 is also placed around 35200 levels

* Among the oscillators, the daily stochastic has rebounded from near the neutral reading of 50 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 positive note amid firm Asian cues . Volatility likely to high on account of the weekly expiry . We expect the index to trade with positive bias while holding above 35800 . Hence, use intraday dips towards 35860 -35930 , for creating long position for target of 36170 , maintain a stoploss of 35760

Nifty Bank Index – Daily Candlestick Chart

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