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NSE (Nifty): 14736

Technical Outlook

*The daily price action formed a Doji candle with long lower shadow confined within last session’s trading range (14350- 14788), indicating elevated buying demand witnessed in the second half of the session. This helped the index to recover intraday losses after retracing Friday’s sharp pullback

*The index has once again maintained the rhythm of respecting 50 days EMA since May 2020, indicating elevated buying demand. The rotational sectoral leadership signifies inherent strength that makes us believe the index will trade with positive bias and gradually head towards upper band of consolidation placed at psychological mark of 15000. In the process, 14400 would continue to act as a strong support. Hence, any dip from here on should be capitalised on as an incremental buying opportunity to ride next leg of up move

*Key point to highlight since March 2020 is that, the Nifty midcap and small cap indices have not corrected for more than 9-10%. Meanwhile, since June 2020, on multiple occasions elevated buying demand emerged from 50 days EMA coinciding with rising trend line. In the current scenario as well, both indices bounced after correcting 8%, each and respected 50 days EMA, indicating inherent strength. Hence, we believe broader market would regain upward momentum and relatively outperform the benchmark in coming weeks

*Structurally, we believe the Nifty has strong support in vicinity of 14400 as it is confluence of:

*a) 61.8% retracement of post budget rally (13662-15432), at 14338

*b) Friday’s panic low is placed at 14350

*c) positive gap seen on February 2 (14469-14281)

*In the coming session, index is likely to open on a flat note tracking muted global cues. We expect index to trade with a positive bias while sustaining above Monday’s low (Spot-14598). Hence, use intraday dip towards 14670-14695 to create long position for target of 14784.

NSE Nifty Daily Candlestick Chart

Nifty Bank: 33603

Technical Outlook

*The daily price action formed a bear candle which remained enclosed inside previous session high -low range signalling consolidation and range bound trade with corrective bias.

*Going ahead , we expect volatility to remain high on account of the monthly expiry on Thursday, whereas the index would consolidate with a positive bias in the broad range of 33300 - 35000 amid stock specific action . Only a formation of higher high -low in the daily chart on a sustained basis and a firm closing above 35000 would confirm conclusion of ongoing corrective phase.

*The immediate support for the index is currently placed at 33300 levels being the confluence of the following technical observations

a) The 61 . 8 % retracement of the budget rally (30906 -37708 ) is placed at 33400 levels

b) The last Friday’s panic low is placed at 33361

c) The lower band of the rising gap area of 2nd February 2021 is also placed around 33300 levels

*The overall structure in the index remain positive as it has already taken 24 sessions to retrace just 61 . 8 % of preceding 11 sessions sharp up move (30906 -37708), at 33500 . The slower pace of retracement signifies healthy retracement and a higher base formation

*In the coming session, the index is likely to open on a flat note on back of muted global cues . We expect the index to trade in a range with positive bias while holding above last Friday’s low (33380). Hence use dips towards 33400-33470 for creating intraday long position for the target of 33730 , maintain a stoploss at 33290

Nifty Bank Index – Daily Candlestick Chart

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