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Nifty

Technical Outlook

• The global sell-off coupled with a depreciating rupee weighed down on market sentiments. As a result, contrary to our expectation, the index breached the key support of 17100. The monthly expiry week started with a negative gap 17327-17156 and traded with a corrective bias as intraday pullback were eventually fizzled out. Consequently, daily price action formed a bear candle carrying lower high-low, indicating continuance of corrective bias

• The formation of lower high-low and a decisive close below August low of 17155 signifies extension of ongoing retracement, going ahead. Key point to highlight is that, past two weeks 1100 points decline hauled daily and weekly stochastic oscillator in oversold territory as it is placed at 14 and 19, respectively. Thus, we expect supportive efforts to emerge around key support zone of 16800-16700 amid elevated volatility owing to Monthly expiry week along with RBI policy. On the other hand, 17500 would act as immediate hurdle as it is 50% retracement of past two weeks decline (18096-16978).

• Rupee movement will also be key monitorable, which could lead to sectoral churn as defensives are attractively priced while rate sensitives may be vulnerable to temporary profit booking after sharp rally recently

• Structurally, over the past five weeks index has retraced merely 38.2% of preceding nine week’s rally (15185-18000) while absorbing global volatility, signifying inherent strength and relative outperformance against global peers that makes us believe, ongoing corrective move would find its feet around 16800-16700 zone as it is confluence of:

• A) 50% retracement of June-September rally of 15185-18000 • B) 52 week EMA is placed at 16760

• In the coming session, index is likely to open on a flat note tracking weak global cues. Despite ongoing volatility we expect Nifty to hold 200 days EMA placed at 16880. Hence, use intraday dip towards 16925-16955 for creating long position for the target of 17042

Nifty Bank

Technical Outlook

• The daily price action formed a bear candle with a lower high -low and a bearish gap above its head (39546 -39229 ) signaling continuation of the profit booking for the fourth consecutive sessions • Going ahead, we expect consolidation amid positive bias in broader range of 38000 -40000 levels ahead of the RBI policy and monthly expiry . Rupee movement will also be key monitorable in the coming week . We believe the current breather on account of global volatility should not be construed as negative rather should be used as a buying opportunity

• The last two week’s decline has led to index approaching extreme oversold territory with daily stochastic reading of 9 , hence a technical pullback cannot be ruled out .

• Structurally , in the longer time frame the index has witnessed a faster retracement as eight month’s decline (41829 -32990 ) was completely retraced in just two and half months highlighting overall positive bias

• The index has support around 37700 -38000 levels as it is the confluence of the 100 days EMA (currently placed at 37710 ) and the 50 % retracement of the major up move (34464 -41840 ) In the coming session index is likely to open on a flat to positive note . We expect a technical pullback in the coming session from the extreme oversold territory . Hence use intraday dips towards 38320 -38400 for creating long position for the target of 38670 , maintain a stoploss at 38210

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