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Nifty: 17305

Technical Outlook

• The index witnessed a lacklustre session as the Nifty oscillated in 200 points range throughout the session amid escalating concerns over geopolitical issues. As a result, daily price action formed a small bear candle over second consecutive session, indicating extended breather after Tuesday’s sharp up move

• Key point to highlight is that, over past three sessions the index has already retraced 61.8% of preceding eight session’s decline (17794-16810). Hence, completion of faster pace of retracement would be the key monitorable in coming sessions which would confirm rejuvenation of upward momentum. Failure to do so would lead to prolonging of consolidation in broader range of 17600-16800 amid stock specific action. In the process, we do not expect the Nifty to breach the key support threshold of 16800. Thus, dips should not be construed as negative. Instead, dips should be capitalised on as buying opportunity. We believe immediate resistance is placed at 17600 as it is confluence of:

• a) 80% retracement of February decline (17794-16809), at 17600

• b) last week’s high is placed at 17640

• The broader market indices are forming a base in the vicinity of 200 days EMA. We believe, holding last week’s low would open the door for a meaningful pullback in the broader market

• During CY22, Nifty has managed to hold the key support of 16800 despite elevated volatility, highlighting strong base formation at 16800 which we expect to hold in coming weeks as it is confluence of:

• a) 80% retracement of Dec-Jan rally (16410-18350), at 16800

• b) Two months identical low is placed around 16800

Nifty Bank: 37531

Technical Outlook

• The daily price action formed a bear candle for the second consecutive session as the index faced hurdle at Monday’s falling gap area placed around 38500 levels . Thursday’s price action remained contained inside Tuesday high -low range as the index in the last two sessions has retraced Tuesday strong up move (36651 - 38461 ) by 50 % signaling lack of follow through movement and continuation of the overall consolidation

• Bank Nifty index has been trading in a broad range of 39200 and 36500 over past four weeks now within which it has failed to generate faster retracement on either sides indicating extended consolidation over next few sessions and higher base formation around 36500 level .

• Structurally ongoing consolidation would help index workout of overbought trajectory and set the stage for next leg of upmove towards 39200 levels . Therefore any dip should not be construed as negative rather would present an incremental buying opportunity

• The index has support around 36500 levels being the confluence of the following technical observations :

• (a) 200 days EMA currently placed at 36170

• (b) the January low is also placed at 36375 levels In the coming session, index is likely to open on a soft note amid weak global cues . Volatility is likely to remain high on account of volatile global cues . We expect index to trade in a range and buying demand to emerge around the 61 . 8 % retracement of the Tuesday up move around 37250 levels . Hence use dips towards 37210 -37280 for creating long position for target of 37540 , maintain a stop loss at 37090

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