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Technical Outlook

• The index witnessed elevated volatility in the eventful week wherein buying demand emerged from 80% retracement of late January up move at 17028. As a result, the weekly price action formed a small bear candle with shadows on either side, indicating breather amid stock specific action

• The escalated geopolitical tensions that led to spike in crude oil prices and the Dollar index is expected to trigger elevated volatility in the equity market within which we expect strong support for the Nifty to be placed around January low of 16800. We believe, in the coming week, India VIX (which gauges the market sentiment) will be the key monitorable, as cool off in India VIX would provide support for the market and lead to prolonging of ongoing consolidation in the broader range of 17600-16800 amid stock specific action. In the process, 17600 would act as immediate resistance as it is confluence of:

• a) 80% retracement of early February decline (17794-17044), placed at 17644

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

• Structurally, despite recent elevated volatility the Nifty managed to hold the key support threshold of 16800, highlighting buying demand at elevated support base. Thus we believe, ongoing volatility would find its feet around 16800 in the coming weeks as it is confluence of:

• a) 80% retracement of December-January rally (16410-18350), placed at 16798

• b) Panic low recorded in January 2022 is placed at 16836

• The broader market indices relatively underperformed the benchmark in the week went by which hauled Nifty midcap and small cap index in the vicinity of 100 days EMA. We believe extended breather from hereon would make broader markets healthy wherein stock specific action would continue In the coming session, index is likely to witness gap down opening tracking weak global cues. As the index is forming lower high-low in daily chart amid rise in geopolitical tension, we suggest to use intraday pullbac

Nifty Bank: 38517

Technical Outlook

• The weekly price action formed a high wave candle with long shadows in either direction highlighting intraweek volatility . However, on expected lines buying demand emerged around the support area of 37500 during previous week

• The escalated geopolitical tensions that led to spike in crude oil prices and the Dollar index is expected to trigger elevated volatility in the equity market within which we expect strong support for the Bank Nifty at 37000 levels, which we expect to hold in the coming sessions and gradually head higher towards 39400 levels in coming weeks being the recent high of early February 2022 .

• The overall structure in the index remain positive any dips in the coming week should not be seen as negative instead will provide incremental buying opportunity in quality banking stocks

• The index has immediate support at the 37000 levels being the confluence of the following technical observations :

• (a) 100 days EMA (currently at 37390 )

• (b) the 80 % retracement of the previous up move (36375 - 39424 ) placed around 37100 levels

• (c) the last week low is also placed at 37319 levels

• Among the oscillators the weekly 14 periods RSI is seen forming a base above its nine periods average thus validates consolidation with positive bias in the index

• In the coming session, index is likely to open gap down amid weak global cues . As the index is forming lower high -low in daily chart amid rise in geopolitical tension . We suggest to use intraday pullback towards 38220 - 38300 for creating short position for target of 37960 , maintain a stop loss at 38410

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